Buying at auction - advice needed.

kgall

Hi,

After a couple of abortive attempts (and following advice from the kind folk on here) we have found an auction property and have got a mortgage offer and had the survey done. The mortgage offer is for £150k, and they have indeed valued the property at that price.

1. Am I correct in saying that this is now guaranteed? i.e. if we win it for £150k or less then we can use the mortgage.

2. The mortgage is with the Halifax, it is a 90% LTV with a fixed 3 year rate of 6.59%, sound OK?

3. What else do I need to do before the auction? I know I need to get a solicitor but how do I go about finding/choosing one?

Thanks in advance,
K

opinions4u

kgall wrote: »

After a couple of abortive attempts (and following advice from the kind folk on here) we have found an auction property and have got a mortgage offer and had the survey done. The mortgage offer is for £150k, and they have indeed valued the property at that price.

Please can you clarify how much the mortgage offer is for. If the house is valued at £150k and you're borrowing 90% then the offer should be for £135k.

1. Am I correct in saying that this is now guaranteed? i.e. if we win it for £150k or less then we can use the mortgage.

They will reduce the offer to 90% of the actual purchase price. £120k purchase price = £108k mortgage.

2. The mortgage is with the Halifax, it is a 90% LTV with a fixed 3 year rate of 6.59%, sound OK?

Not untypical at 90%, but there are cheaper deals out there.

3. What else do I need to do before the auction? I know I need to get a solicitor but how do I go about finding/choosing one?

Local recommendation. Friends who've received good service are the best source of information.

You need to appraise the solicitor that it's a purchase via auction and make them aware of potential completion deadlines that could apply. It would be wise for the solicitor to start doing the searches asap to ensure there are no delays.

Out of interest, how have you managed to get a mortgage offer without a solicitor being named on the application? I'm a little concerned that you've only had a mortgage promise (AIP) so far. That is certainly not good enough to allow you to complete within the timescales needed for an auction purchase.

I still think the most likely outcome here is that somebody else will get the house and you'll lose all the fees you've handed out. This is what happened to every single one of the mortgage applications I took where property was being bought at auction. None of them ever needed to complete.

koexelek

MortgageForce wrote: »

Kgall - as pointed out above, several factors seem all wrong in this case and I would recommend you take careful note of opinioms4u's comments.

The one certainty is there are no certainties when buying at auction.

it is a brave person who buys at auction via a mortgage.

Even if they are happy to lend the funds, what if their surveyor gives the property the thumbs down ? :eek:

getmore4less

Don't forget the fees and buyers commisions.

The max bidding price need to reflect costs.