Financing Auction Property
For more on financing auction property, please download our complete guide to mortgages for auction property.
Want to be approved for finance before placing your bid? Drop our Mortgage Team a quick email to finance@assetz.co.uk or call and speak to an adviser on 0161 482 7793.
This section has been supplied by Assetz Finance Limited, the finance division of the Assetz group of companies. All Assetz Auction clients have access to their own mortgage adviser at Assetz Finance Limited to help them secure the right mortgage deal for their purchase.
Investors who use a traditional auction house have to be confident that they will be able to raise the required finance before making any offers as their bid will become binding the moment that it is the winning bid. The investor has to pay a typically 10% deposit on the day that they have placed their bid and won and this will be at risk if they cannot raise the finance to complete the transaction.
It is highly recommended to go to an auction house only after having received a decision in principle (DIP) from a lender (unless you are a cash buyer) that shows that the finance required is in theory available to you, given your circumstances. However, the lender does not know which property exactly you are going to secure and therefore this DIP will be subject to the property.
Unlike a true auction house, the bids made on the Assetz online auction site are not binding at the time that they are made. This gives the investor a few days after finding his ideal property to arrange a decision in principle that takes into account the property itself as well as the investor’s personal circumstances. This is therefore a safer way to buy property at auction.
On the Assetz online auction, bids will normally only be accepted from investors who can provide a DIP within a week as the vendor is taking a huge hit on price with the compensation that the purchase will complete promptly and smoothly.
Most vendors will not allow ‘no money down’ finance packages to be used as they take too long to arrange and the investor will, therefore, not be able to complete within the required timeframe. All investors must, therefore, be able to prove cash deposits of 30-40% of the purchase price (depending on the LTV of their chosen mortgage product).
Once your bid has been accepted, your mortgage adviser at Assetz Finance will continue with your full application to the bank to secure your mortgage deal in time for a swift completion (completion must take place within 28 days of your bid being accepted).
Any questions? Speak to a mortgage adviser on 0161 482 7793 or email the finance team at finance@assetz.co.uk.
