Auction Bridging Finance
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If you are buying a property at auction you need to know that you have the finances behind you to complete the sale. The last thing you want to do is buy a property and then find you are unable to raise sufficient funds, thereby forfeiting your deposit. Before going to auction it's important to understand what Auction Bridging Finance is available to you.
Why choose a Auction Bridging Finance
How auction purchases work
At auction you will be required to pay a non-refundable deposit, usually around 10%. Completion won't occur until 28 days later. It's within this time frame you can arrange Auction Bridging Finance. It's not always about the best rate, with flexible terms from reliable lenders being more important. We deliver a rapid service for supplying auction bridging finance and deal with lenders that specialise in quick completions to ensure your money is available on time. As an independent broker we aim to give you the widest choice of available finance options.
- 70-75% LTV is available, rising to 100% if you have other properties as security
- Finance can be raised on existing properties or on the valuation of the new property
- Interest rates are calculated on a month basis, between 0.55-1.25%
- All charges and interest payments can be rolled up at the end of loan period
Frequently Asked Questions
What is the most import an thing to consider when being approved for a Bridging Loan?
Your exit. The first thing lenders will want to know is how you intend to repay the loan and how credible that plan is
How much can I get?
There is no maximum nominal amount but it depends on the LTV. For a 1st charge we can get up to 75% LTV and for a 2nd charge up to 65% LTV all depending on the nature and location of the property/asset being offered as security.
How long can I have a Bridging Loan for?
Normally up to 12 months but in some circumstances you can extend to 18 or even 24 months though interest may need to be periodically serviced in these longer loans.
Can I get one on an unmortgageable property?
That’s exactly what Bridging Finance is for. You can use the bridging Loan to bring the property to a mortgageable condition and exit the Bridging Loan with that finance.
How fast can it be arranged?
It can be done in 48 hours but at a cost, so we would prefer to say 5-7 days.
Can I get one if I have adverse credit?
Generally speaking yes, but if your credit is very severe then maybe not.
What will the cost be?
Interest is expressed monthly and is from 0.5%-1.75% per month. Lower rates are for loans with a low LTV, on a property/asset that can be easily resold in the event of foreclosure, a strong-credit borrower and a clear exit.
What are the fees to arrange a loan?
If you choose to use us to arrange your finance you will be charged a fee of typically 1%. Additionally there may be a lender fee (usually 2%) to be paid and it is usual in this market that the borrower also pays the lender’s legal and valuation fees.
Why should I use a broker to arrange a Bridging Loan?
You can do all this yourself but with 80+ lenders out there, we can more quickly get you to the best rate and also ensure you are borrowing from a reputable, established lender. We will also guide you through the application process and ensure your application is presented to the lender in a manner than makes it most likely to be accepted at the lowest rate.
What is the maximum LTV available for a second charge bridging loan?
Probably no more than 70% LTV is available but it depends on the asset and the exit strategy
What is needed to apply
Applying for a Bridging Loan is very easy. Below are listed the things you need in order to apply.
- Eligibility CriteriaYou just need to own a property that can be used as security and have a reasonable credit rating (though sometimes that’s optional too)
- Documents RequiredProof of ID, proof of ownership and an application form
- Additional CommentsLoans can be arranged in as little as 48 hours but you pay for the privilege. Normally they take 7-10 days.
There are 100+ bridging loan lenders in the market at the moment. You might this this was a good thing but the trouble is that they don't all operate to the same standards. Some promise money when they don't have it and others have fees well hidden in their documentation that you don't find out about until it's too late. We deal with less than 20 of the lenders and these are established relationships that we know won't let our clients down. To gain the benefit of our experience call us on 01494 410 125 to discuss your project.
Read our Auction Bridging Finance Guides
All you need to know about Auction Bridging Finance
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What is Auction Finance?
Auction Finance, is the term used to describe how you fund a property purchase made at auction.
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How does Auction Finance work?
Auction Bridging finance is very fast – it can usually be arranged in a matter of days. This guide provides more information on how it works.
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How to finance your auction property?
Once you have bought a property at auction, the next step is to decide how to finance your auction home.
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01494 410 125
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