I want to buy an investment property at auction but that only gives me a limited time to complete.
What are the chances of getting finance in place in time?
Right, so you’re thinking about buying an investment property at auction but are worried about arranging the finance in time.
Fair enough. It’s a tight squeeze when you have only about four weeks to wrap everything up.
But don’t fret; it can be done.
The trick is to grab a short-term bridging loan to snap up the property first, then sort out a more traditional mortgage to pay off the bridge.
Why, you ask?
Well, it’s usually quicker to arrange a bridging loan, and some lenders specialise in funding auction purchases.
Now, I won’t lie to you, there are a few things that could throw a spanner in the works, like:
- Valuation not done on time
- Solicitors dragging their feet
- Lenders’ credit departments are slow to decide
- Searches getting delayed or uncovering issues
The lenders who specialise in this game usually have their trusted team of valuers and solicitors who work quickly and efficiently. Some might even skip the valuation, thinking, “If someone will pay that at auction, that’s its value.”
Searches can be sorted swiftly; if there’s a hiccup, they might get an indemnity against any title issues.
Decision-making tends to be slick with these folks, and if you’ve got time, you can even sort out outline terms beforehand to bid at auction with confidence.
But here’s the thing: you need your team in place. Your solicitor is key, so make sure you’ve got a good one who’s got the time to focus on your case. Ideally, someone from a firm with multiple partners.
And if you’re having trouble finding the right lender, let me know. As always, there’s no one-size-fits-all in finance, so I can help you find what’s best for your situation.
How to Get Involved
Got a finance question? Ask Honest John!
Email me at askhonestjohn@sterlingcommercialfinance.co.uk, and I’ll do my best to provide answers in a way that makes sense. Expect straight talk, a bit of humour, and insights you won’t find in a Google search.
So, ask away with your question—I’m ready!
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