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I've been looking at property at an online auction.
I saw the property for sale some weeks (maybe months) ago on Rightmove. The price was then dropped from 155k to 150k and some weeks later down to 145k. The property is located in my city and I've done a lot of research and believe the property would be a good buy to let property for ourselves.
It's now available on an online auction website where it has received 3 bids and it sitting at 122k.
I've never brought a property in this method before so how would I go about getting a buy to let mortgage for this?
Is it as simple as ringing up a broker, stating I would a max price of x amount and ask for a mortgage based on this? However, what happens if the auction price is lower or higher than the mortgage I've been offered? Is it quite quick and straightforward to update the mortgage in principle?
For past 2 properties I've used an online mortgage broker who take some days/weeks to arrange a mortgage.
Also, the online auction website states,
Contracts will exchange immediately. There are 28 days in which to complete the purchase.
Any advice please?
How long does the auction have to go? Do you think you can arrange a mortgage (including valuation) in this time?
The 28 days is the normal timescale for payment after an auction ends so any company that deals with auction properties should be comfortable with this.
Hi there... I am afraid that my view is that if you are buying at auction you should have the funds in place BEFORE you bid. This will usually mean cash. I would NEVER bid on an auction property and be reliant that the same property will support a mortgage. You exchange on the fall of the hammer and, like any other purchase, exchange = commitment .
If you are ready - you have all the required mortgage documents, have a clean credit, low LTV and great conveyancers. It's possible to complete a Buy-to-Let Mortgage prior to the 28 days to complete.
That is on the basis of everything going your way, the alternative is short-term finance. A lot of auction properties are bought on Bridging Finance or Cash then later remortgaged to Buy-to-Let.
It's more expensive but they are typically quicker. It's a short-term fine we all pay to get an auction acquisition. The cost of doing business.
You would typically approach a broker - they will complete an investment affordability check. Calculate the maximum you can borrow. The good ones will typically complete an online valuation, to suggest what the maximum the lender will lend.
You can take this information into the auction house knowing your financial limit.
If the auction price is lower, then that is great. If it's higher then it plausibly could be fine. It depends if the lender agrees with the price. The odd auction lot goes for above what is reasonably the market value, lenders won't go higher than what they think its value is.
The team at Bespoke Finance on 08009202001 or email email@example.com would be happy to help - https://bespokefinance.info/auction-finance
_________________________________________________________________________The above post is not financial advice, its often me rambling - passing time on a coffee break.If you are looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance._________________________________________________________________________