Why You May Choose Property Auction Finance
- By Sean Horton
- Published 04/29/2008
- Finances
- Unrated
Why would you choose property auction finance? Buying a property at auction has become a very popular way in which to purchase a home either to live in or as an investment property. Property auctions are generally seen as a way to get a property at perhaps a lower price then you might expect to pay if you were looking through estate agents.
Auctions are used by developers or investors who wish to sell a property quickly in order to make a profit or by lenders or sometimes even councils who wish to recoup money. If you bid on a property and are found to be the successful bidder then you will often find that you are given a deadline of up to 28 days in which to complete the purchase. It is therefore vital that you have your property auction finance in place before you go to the auction so that you do not risk losing your often substantial and non-refundable deposit.
Once you have been declared the winner you will be involved in a binding contract so you have to take the process seriously and be fully prepared. This is particularly important if you need to arrange property auction finance. If this is the case it must be sorted out well before auction day. The amount that you will be able to borrow can vary and will depend on whether you have other properties that you can secure the loan against.
It is imperative that you to obtain at least approval in principle from your chosen lender or broker before the auction. A popular choice for many people is the use of short term lenders to allow the completion on the property quickly and efficiently.
If you are looking to buy a property at auction and know that you do not currently have enough funds to pay for the property straight away - for example if you have money tied up in an existing property that you are waiting to sell - then one of the popular short term loans you can take out, and perhaps the simplest, is a bridging loan. A bridging loan is a type of short term finance that is often taken out on the auction property and then be repaid once you have either recouped your money from another property or once you are in a suitable situation to be able to take out a standard mortgage.
This type of property auction finance can either be taken out as an open or closed bridging loan, closed being that you have a fixed date for making the repayments and open whereby no date has been agreed for the repayments. The benefit of taking out a bridging loan is that it can often be arranged relatively quickly and easily. In fact, a loan on an auction property may be arranged in a few days with a decision being given in hours, meaning that you can move quickly once you have found a property that you are interested in.
Auctions are used by developers or investors who wish to sell a property quickly in order to make a profit or by lenders or sometimes even councils who wish to recoup money. If you bid on a property and are found to be the successful bidder then you will often find that you are given a deadline of up to 28 days in which to complete the purchase. It is therefore vital that you have your property auction finance in place before you go to the auction so that you do not risk losing your often substantial and non-refundable deposit.
Once you have been declared the winner you will be involved in a binding contract so you have to take the process seriously and be fully prepared. This is particularly important if you need to arrange property auction finance. If this is the case it must be sorted out well before auction day. The amount that you will be able to borrow can vary and will depend on whether you have other properties that you can secure the loan against.
It is imperative that you to obtain at least approval in principle from your chosen lender or broker before the auction. A popular choice for many people is the use of short term lenders to allow the completion on the property quickly and efficiently.
If you are looking to buy a property at auction and know that you do not currently have enough funds to pay for the property straight away - for example if you have money tied up in an existing property that you are waiting to sell - then one of the popular short term loans you can take out, and perhaps the simplest, is a bridging loan. A bridging loan is a type of short term finance that is often taken out on the auction property and then be repaid once you have either recouped your money from another property or once you are in a suitable situation to be able to take out a standard mortgage.
This type of property auction finance can either be taken out as an open or closed bridging loan, closed being that you have a fixed date for making the repayments and open whereby no date has been agreed for the repayments. The benefit of taking out a bridging loan is that it can often be arranged relatively quickly and easily. In fact, a loan on an auction property may be arranged in a few days with a decision being given in hours, meaning that you can move quickly once you have found a property that you are interested in.
Sean Horton
Sean Horton is a Director of Enhanced Wealth, a whole of market mortgage broker and IFA specialising in mortgage advice and the associated areas of income protection, mortgage protection, and property auction finance.
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