Bridging Loans for Auction Properties

It is crucial for winning bidders in an auction to arrange the funds within the 28 days after a successful bid. This timescale sometimes becomes very difficult for buyers that have already deposited 10% of the full amount in advance after successfully bidding for the property. If they are unable to pay the remainder of the amount of the bid within the set 28 days, then they lose the amount advanced in addition to the property. Long-term financing like mortgages can be difficult to achieve in this short timescale. In such conditions, bridging loans provide the people with a short term financing facility. The 10% advance already paid can be considered as the exchange of contracts in a standard property purchase. Getting a bridging loan for the purchase of property by auction is straightforward and the loan can be repaid once the existing property has been sold. Other options do exist in the even that you elect not to repay the bridging loan. It is possible that this bridging loan could also be converted into a longer term financing arrangement or made into a mortgage for remainder of the payments. However you choose to use them bridging loans provide people with a chance to participate in auctions with confidence and get the properties they are bidding for without being concerned about their ability to produce the finance in a short space of time.

Don’t Miss out on an Auction Due to Financial Issues

The most helpful aspects of bridging loans are that the loan can be arranged quickly and they offer greater flexibility than a mortgage does. You can get a decision from your lender in few hours, even during an auction and can the funds will be available in just a few days. This offers bidders a golden opportunity to complete the auction purchase quickly without worrying about the time set by the auction company.

Bidders can also get bridging loans for the payment of initial the 10% advance needed for the bid. However, we recommend that the bidder gets this approved by the lender before taking part in the auction to avoid any complications arising later.

Additionally, it is possible to get a bridging loan which is greater than 100% of the bid price of the property purchased in the auction. This can be helpful if you need extra funds for the renovation of the property, or to settle any other outstanding expenses. It is however important to note that this arrangement must be approved by bridging loan provider before the auction takes place. This will also require some additional securities to be in place.

It is not possible to specify all the guidelines here. Clients are invited to attend a professional consultation with us were we can determine the maximum size of bridging loan that we will be able to offer them. You can contact us any time for our professional services and our representative will assist you in making an application for a bridging loan.