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Auction Finance

While auction finance can be secured after the auction room sale, it's advisable to secure the finance beforehand to lessen the risk. This also allows you to work within your agreed budget at the point of sale. Auction Finance is a quick temporary way to purchase a property call us now to discuss your options.

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Buying a property at auction can be a great way to cut out the lengthy process associated with buying a house - without the solicitors and surveyors. Once the hammer falls, the contract is signed and a non-refundable deposit is put down on the day. The sale is completed within 28 days.

Until a more permanent form of repayment is in place, such as a mortgage, you will need finance to secure the property. As money might not be readily available, auction finance is a quick way to bridge the gap, especially if money is tied up in other ventures. The popularity of auction finance is due to the speed in which it can be accessed.

Bridging loans are the most common form of auction finance, although there are other types available. The loan can be used to finance the entire price of the property, the deposit, or the balance.

The following topics are covered below:

Points to consider for Auction Finance:

How auction finance works

Points to consider for Auction Finance:

  • While auction finance can be secured after the auction room sale, it's advisable to secure the finance beforehand to lessen the risk. This also allows you to work within your agreed budget at the point of sale.
  • If you're using bridging finance, rates tend to be a lot higher than traditional mortgages. However, as the loans are short term, they remain the most ideal way for investors to secure property finance and take advantage of deals they wouldn't be able to otherwise. This type of finance is suitable for commercial, mixed-use properties, land, and residential properties.
  • Auction finance rates change all the time. Get in touch with an adviser today to find out what the latest rates are.

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How auction finance works

1. Firstly, find a property you'd like to buy. Then, tell the lender it's what you intend to purchase. It's important to find the right lender, as some will be more suitable than others depending on your circumstances. Revolution Brokers are specialist mortgage advisors who can match you with the right lender to meet your needs.

2. Once you're matched with the ideal lender, they will assess you for suitability. The lender will want a property valuation and will want to see proof of your earnings, credit rating and financial history. There is help for individuals with less than perfect credit, so don't be put off.

3. When the lender approves the finance, you'll need to budget for the property. The loan could be for part or all of the property. A specialist adviser will tell you the percentage you are able to borrow, and how much you'll need to offer upfront.

4. Once you've won the property at auction, you'll need to put the deposit, which is usually 10% but can be more, depending on the terms of the sale. You'll then have 28 days to complete the sale. Your lender will then release your funds to the vendor's solicitor and the deal is complete!

If you're thinking of buying a property at auction, get in touch with Revolution Brokers today for expert advice.

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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