Ideally your Auction Finance strategy will enable you to go to an auction in a position equivalent to a cash buyer. There are a variety of strategies available to you to achieve this and our recommended brokers will be pleased to explain these to you in order for you to be able to make informed choices in terms of the best strategy possible for you. Arranging mortgages on properties you would like to purchase in advance of an auction is rarely an economical strategy. The cost of arranging the mortgages will be wasted if you are not the highest bidder and the transaction is abortive. Therefore, alternative strategies for auction financing should be considered seriously and professional advice from an experienced finance broker in this market is strongly recommended. IFA’s and mortgage advisers are rarely the right people to approach for advice and guidance on Auction Finance. Our advice is to talk to an experienced Auction Finance broker who is an NACFB member.
Even if you have the cash to purchase you should take professional advice, especially if you intend to raise finance on the property subsequently. This is because most lenders refuse to grant a mortgage on a property within 6 months of purchase.
When you are successful at auction you are expected to pay a 10% non-returnable deposit there and then. You will usually be expected to pay the balance of the purchase price on completion within 14-28 days. It is therefore important to have you financing prearranged and your solicitor on notice to act quickly.
If you have a strategy of purchasing as many properties as possible, whilst there are bargains to be had, you may wish to consider taking further advances or remortgaging after you have added value to the properties and especially if you've managed to buy one which is valued in the open market for considerably more than you paid at auction. The benefit of doing this is to release the deposits you have tied up in your properties to buy more. Remember though, this may only possible after six months of ownership. With this in mind you may wish to consider Bridging Finance. or a variety of other strategies which may only become apparent following a full review of your financial position with our recommended brokers.
Note you are responsible for your property as soon as you've bought at auction so you will need to insure the property. We are able to provide quotations through our recommended supplier of landlords insurance.
All of our Commercial Brokers are members of the NACFB (National Association of Commercial Finance Brokers), they carry Professional Indemnity Insurance and subscribe to the NACFB Code of Practice which is registered with the Office of Fair trading.
Your request for contact will typically be followed up the same day during office hours.
If you have any questions please do not hesitate to contact us 9-5 Monday to Friday: 01603 428500