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buying houses at auction?
- Thread starter AshleyC
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Buying at auction you typically have to pay a deposit up front (usually 10-15%) and then the balance within a set period, usually 4 weeks. You can fund with a mortgage (both residential and buy to let depending on your reason for purchase) and yes banks will lend. Mortgage processing times can be an issue, 4 weeks is pretty much a minimum (no idea why it takes so long) so it's essential to get an "agreement in principle" for the amount you think you'll need to borrow before the auction, get all your paperwork lined up, then schedule an appt to arrange the mortgage asap afterwards (ideally same/next day), then chase up the bank if necessary to keep things moving. The auction terms usually threaten penalties for failure to complete in time.
Another option is short term lending will be on offer at auction that can tide you over until arrange a mortgage but this will obvs cost you.
Another option is short term lending will be on offer at auction that can tide you over until arrange a mortgage but this will obvs cost you.
viv1969
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Quoting from this site:
Finances
In order to buy at auction, you are required to provide 10% of the purchase price up front once your bid has been accepted. When establishing your budget it is important that you ensure that these funds will be available when necessary.
The remainder of the funds will need to be available at the stipulated completion date, typically 20 – 30 days after the auction.
If you are purchasing the property using a mortgage, you should not bid at an auction if you have not yet received a mortgage offer. When approaching mortgage lenders it is vital you let them know you intend to buy at an auction, and it is advisable to obtain an Agreement in Principle before you start your property research.
Finances
In order to buy at auction, you are required to provide 10% of the purchase price up front once your bid has been accepted. When establishing your budget it is important that you ensure that these funds will be available when necessary.
The remainder of the funds will need to be available at the stipulated completion date, typically 20 – 30 days after the auction.
If you are purchasing the property using a mortgage, you should not bid at an auction if you have not yet received a mortgage offer. When approaching mortgage lenders it is vital you let them know you intend to buy at an auction, and it is advisable to obtain an Agreement in Principle before you start your property research.
srichards
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You can but it is fraught with potential problems. With most auctions you only have 28 days to complete as well so it pushes everyone to get stuff done. It's easy enough with a cash purchase but throw a mortgage in and you are looking at potentially failing to complete in time. The amount of foot dragging that goes on with a simple house purchase is ridiculous.
Searches often take weeks for no good reason as well.
Having bought a repossession with a mortgage and a re-mortgage on the previous property instead of selling it only just happened in time and that was with me pushing and prodding things along and returning paperwork same day every single time. I think I ended up exchanging and completing on the 28th day or even a day or two later. It was barely in time anyway. The survey on the new place took ages to come back so you need to find a surveyor that is on the mortgage company's panel that can file the report within a couple of days.
You pretty much will have to push along everyone the entire time to get it done within those timescales as these days it seems to be ridiculous 3 months just to buy most places.
Searches often take weeks for no good reason as well.
Having bought a repossession with a mortgage and a re-mortgage on the previous property instead of selling it only just happened in time and that was with me pushing and prodding things along and returning paperwork same day every single time. I think I ended up exchanging and completing on the 28th day or even a day or two later. It was barely in time anyway. The survey on the new place took ages to come back so you need to find a surveyor that is on the mortgage company's panel that can file the report within a couple of days.
You pretty much will have to push along everyone the entire time to get it done within those timescales as these days it seems to be ridiculous 3 months just to buy most places.