If you are thinking of buying a property at auction, Robert gives some helpful advice about different ways you can finance the deal.
- To buy at auction there will be a need to buy quickly.
- Usually there are three main options to financing.
- Use cash, bridging finance or some form of commercial finance (agreement with a bank for draw-down facility).
- The application process is done prior to the auction.
One client has asked us recently about how to finance properties bought at auction.
Typically, when it comes to auction purchases the need to buy the property quite quickly is going to be paramount and so you’ll need the cash ready to buy.
Another way of buying is using bridging finance and another is using commercial finance.
There are usually three main options, available.
If you are to look at high street buy-to-let mortgages they will typically take too long to acquire to meet the timeframes required to buy at auction, so the standard buy-to-let mortgage might take 8 weeks just to get set up and the financing, drawn down.
Usually, with auctions, you’re going to have a period of 4 weeks from the hammer going down to completion on the purchase. You need to have the funds available to complete quite quickly.
When you’re looking to buy a property at auction, in terms of financing, I’d usually look at those three main means.
Cash – if you’ve got the cash available to buy, that’s great.
Second would be bridging finance.
The third route would be some form of commercial finance or an agreement with a bank that gives you a draw-down facility to buy properties that fit your particular criteria.
They’ll usually be able to act much quicker for you because the application process is done prior to purchase. So, if you’ve not already, and you’re thinking of looking at auctions, but you’ve not already looked at the different finances available, it’s certainly worth looking at bridging finance and at commercial finance, also.
/ / / / Read More About Property Auctions / / / /
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