Property Auction

Tomson

Hi All,

We have found a property that is coming to Auction mid-June. We really like the house and want to go and make bid.

Our situation is that we sold our house in Deecember and have been renting since then.

The property guide price is £400K - 450K, we have a deposit of between £110K-120K.

I am self employed (director of ltd company 50%) and my company breaks even each year (a small building company). My tax return showed a loss for 07-08 as I lost some money on a couple of developments, my 08-09 return will show earnings of around £80K, my wife works part-time @ approx £8K p/a.

There you have-it, what are the chances of being able to raise a mortgage for the balance within 28 days should we be succesfull @ auction?

Also what happens regarding the deposit you pay on the night, this is 10% which in-turn if not included in the mortgage greatly reduces the % deposit against loan value and therefore affects the rate we could be offered.

Thanks in advance for comments.

Tom

Tomson

I realise this would be a stretch, if possible at all. But i forgot to mention that I would want to try and get a 5 year fixed deal to make this managable and give time for my other investments to mature (a couple of shares, and a Buy-to-let flat I own) then re-mortgage at the end of the term with a larger deposit, or hopefully pay it off, or sell it if things have gone tits-up !

Thanks,

poppy10_2

Magic 8 ball says... chances are slim

silvercar

If your BTL is mortgage free, you could raise a mortgage on that to help fund the purchase.

Tomson

Sadly not, I would suggest that the BTL is break-even at best after the current slump.

Surely though I would have 30% if it went for £400K, even with my 'self-cert' status this must account for something?

silvercar

I don't know if true self-cert still exists; lenders can ask for evidence before they release money. On paper, you haven't made a penny profit yet and next years forecasts are just forecasts.