Other than your own savings, or profit sitting in business accounts. The most popular option is to secure a loan from a lender.
Ducks in a Row prior to Bidding
Lenders for Auction Finance typically will not be inclined to offer loans for residential properties that don’t meet basic amenity requirements such as having a functional kitchen. Auction Finance Brokers can help navigate you toward properties that are more likely to have loans accepted – and the lenders that are willing to offer finance.
Also, ensure you have a quality conveyancer ready to work for you on short notice.
Credit Score and Funding
Consider whether you need a Bridging loan, or if you are looking for a decision in principle (usually enough to secure the bid).
Usually, a Broker will be able to check your credit score when making an application on your behalf.
Speak to a Quality Commercial Broker
The nature of buying at an Auction means that you need to have a good understanding of the types of loans available to you, and your obligations if you take one out. We would suggest speaking to an experienced Auction Finance Mortgage Broker.
When a bid is accepted the buyer will need to put down a non-refundable reserve fee (5%), exchange contracts in 56 days or a 10% deposit (Traditional Auction), and exchange contracts within 28 days.
Need Auction Finance
Interested in Auction Finance? Journey Mortgages can help you with loans for Auction properties. Get in touch via our contact section and we will be happy to take look at what is available.
Attention: Late repayments can cause you serious money problems. For help go to moneyhelper.org.uk