Mortgage advice please on a house to be bought in an auction

RC21

Hi all,

My Girlfriend and I are FTB's and have been looking to get on the property ladder for about 8 months with no luck.
Anyway we have seen a house we love, it's a bit run down which isn't a problem as it could be easily sorted but it's for sale in an auction.

My Girlfriends Dad has done a survey (he does this sort of thing) and he says the house is worth £100,000 in it's current state and will probably be worth £135,000-£140,000 when it's done up so it’s a good opportunity but we are looking to keep it for ourselves and not as an investment.

The list price of the house is £65,000 but know it will go for a lot more than that. We have set a limit of £90,000 (We won't go above it!!)
If we won the house in the auction we would need to pay the auction house 10% of the winning price, let’s say we got it for £90,000 we need to give them £9,000 which we have in savings so that’s not a problem.

So then we would need a mortgage for £81,000 but the auction house will need the money for the property within 28 days otherwise the seller can withdraw it from sale and keep our money.

So:
Is it possible to get a mortgage within 28 days of buying a place?
If so what assurances can be provided?

Is there anything I can do now before the auction to speed up the process?

Thank you very much for any help.
RC :beer:

MortgageMamma

I don;t think any guarantees can be given on a completion date but I would advise the following:

Speak to a fee's free whole of market mortgage broker and get them to source you a good deal. Explain your circumstances and ask them to send you an application form asap and arrange a mortgage promise for you from the lender. (this is something where they credit check you and look at your income and provisionally accept your mortgage app subject to underwriting).

When you get the full application, complete it and sign it and send it to your advisor with identity documents prior to bidding. (the advisor should pre complete the majority of the form for you if in a none face to face sale). The form will need to be submitted to the lender so they can survey the property for fitness to lend on before the auction.

Most people instruct a solicitor beforehand who should do some of the legal work, this could be costly if you do not win the bidding. You also have to consider you may have to pay an application fee to the lender and pay for a valuation to be instructed via the lender before bidding.

Although some good bargains can reputedly be had at auctions, be careful as you could incurr a lot of expense here without a result as you can see there are clearly no guarantees.

you will probably get some input from more experienced advisors later

good luck and happy bidding

zag2me

Remember 65k is just the price to get people through the door. It could go for alot more than 90k.

Somerset

Hope it's not the house we're going to look at this weekend who's auction guide is 65K :eek: