Auction loans and how bridging finance can help
In order to complete a purchase at a property auction, including commercial property, the buyer must pay for the property within a certain time frame, often 28 days. Obtaining a mortgage from a high street lender is often impossible under such strict time constraints, therefore a bridging loan, which can be known in these circumstances as an auction loan, is the ideal way to raise the finance required quickly, ensuring you adhere to the auction time scales, set by the auction house.
Auction finance allows you the opportunity to find the property that is right for you, and we’re here to help you open the doors to your auction purchase.
We are experts in auction bridging finance, and our underwriters regularly speak at property auctions,to provide information on our auction finance services to those that may need it. We can do this at an online auction during the current climate, alternatively when everything returns to normal in person at the auction house.
Their experience means they are equipped to deal with any scenario that may arise during your auction purchase. Therefore reducing the risk that the transaction would not complete.
At MFS, we help our clients ensure that their purchase runs smoothly. Our process is simple and provides you with a bespoke bridging finance service that is tailor-made to suit your financial needs. Our loans are designed with only you in mind, and are fast and flexible, with competitive rates.
The process of buying at a property auction
- As the winning bidder, you will be given 28 days to complete the purchase
- Our bridging loan product gives you the money you need to complete the property purchase within the allotted time frame
What is auction finance, and does it apply to me?
Auction finance is used to pay for items bought through auctions and are therefore intended for quick payments with a short turnaround time. Our bridging loans allow you to purchase property in this way. We provide you with the money you need to complete the property purchase within the time frame.
Auctions can be a great place to find old properties with great potential to invest and build profit or build up your property portfolio. Whether you’re looking to buy-to-let or refurbish an old property to sell on at a later date, we’re here to help.
We understand that auctions aren’t just for seasoned property investors, so if you’re new to the auction community, that’s no problem at all. We’ll be with you every step of the way, guiding you through our process and answering any questions you may have.
How our bridging finance can help you:
- Residential investments, Including HMO’s & Multi-lets
- Refurbishments for auction property
- Semi-commercial property
- Commercial property
What we do and why we’re good at it
When it comes to buying your first property at auction, or your hundredth, remember this:
Don’t panic, we’re here to help.
Completing a property within such a limited time span can be tricky with a traditional mortgage, even more so if you’re looking to use a commercial building or a more unusual property as your security for the loan.
Bridging loans are considerably quicker, with our completions being from as little as three days, even with complex circumstances. Our lending period also ranges from 3 – 18 months and with no early repayment charges, if circumstances change then you can exit at an earlier date that works best for you.
We pride ourselves on putting our clients first, so we tailor our bridging loans to suit your specific needs.
Our underwriters specialise in the complex, and they aim to minimise any delays that can potentially arise. You will be provided with a dedicated underwriter for you case, who will happy to work alongside you before, during and after the auction, to address any issues that may be of concern for you.
Our loans will always require an exit plan, which can be through refinancing, re-mortgaging or even buy-to-let. So you will need to know that before we are able to provide a loan.
Our loans are created around your personal financial position, so if you have any questions on your circumstances, or any aspect of auction finance, contact our underwriters today to discuss how we can help.
We are able to lend where many others may not, click here to see our full criteria.
Our bridging loans are available to individuals and businesses alike e.g. Limited, LLPs, SPVs, Offshore etc. and for an array of complex circumstances e.g:
- Discharging adverse credit
- Exiting IVAs
- Repairing CCJs
If you’re unsure if you are eligible for auction finance, contact one of our underwriters today. They will be able to take you step by step through our process and answer any questions you may have.
What you need to know before buying a property at auction
Buying at auction can be a great way to get the property you want and a great competitive price, but you can’t just go in blind.
Invest your free time into researching the type of property you want. This way, when you come to looking through auction catalogues, you’ll know what you want and therefore which auction will be worth your time attending.
Get your finances in place beforehand
This is the most important aspect. Confidence in your financial situation and knowing how much you have available to you, is a great starting place. If your finances are in place before the auction, it will decrease the risk of the purchase falling through, an losing your deposit.
This is where we come in, we’re here to make the purchasing experience simple and smooth. Our underwriters will deal with the paperwork, ensure everything is in place and sort out any documents that are needed quickly and efficiently, so that you are able to purchase your property with no financial worries.
Visit the properties you’re interested in
One thing you should keep in mind is there is always a reason why a property is at auction, and it is your job to find out what that reason is.
Understanding what issues come with a property means that you can take this into consideration when bidding, this way you can be ahead of the game and prepare any possible additional finances that you may need.
Here are a couple of things to keep in mind:
- Has the property been on the market, if so, for how long?
- Has the property fallen through? If so, why?
- How long have the previous owners been at the property?
- What is the property’s history?
Download the legal pack
Not understanding the small print can lead to trouble, so it is important that you understand every aspect of the legal documents. Speaking to a solicitor can ensure that you understand each characteristic of the property.
Certain aspects may be left out of the legal pack, so it is a good to receive legal advice. If you do receive an incomplete pack, be sure to ask further questions to understand why this is.