Mortgage for auction property

nollag2006

Anyone got any views on where / how to obtain the best product?

I am considering buying another BTL property at auction later in the month

Cheers

somethingcorporate

To state the obvious a broker would be a really good place to start.

silvercar

Do you own your own home with a lot of equity? If so you could line up a new mortgage or further borrowing at a better rate than BTL and the interest would still be considered an allowable expense of your letting.

That would save worries over whether the mortgage came through on time. One of the problems with auction purchases is the requirement to complete in 28 days.

Dave_Ham

If not done before, please read up more than just these responses as there are many pitfalls.

Typically, you need to pay 10% on the day and complete within 30 days.

Many investors will seek to have the mortgage valuation done in advance to ensure speed of completion, but obviously costs are being incurred at this point.

Silvercar makes a sensible suggestion and many a buy to let investor use residential funds initially and then can remortgage out in 6 months as capital raising and take advantage of the increase in value due to any works undertaken..

Remember when buying at auction, you will only get a mortgage if the valuation says it is habitable, typically has running water, working kitchen and bathroom.

Good luck....

Wutang_2

nollag2006 wrote: »

Anyone got any views on where / how to obtain the best product?

I am considering buying another BTL property at auction later in the month

Cheers

Have you read your own signature?

nollag2006

Dave_Ham wrote: »

If not done before, please read up more than just these responses as there are many pitfalls.

Typically, you need to pay 10% on the day and complete within 30 days.

Many investors will seek to have the mortgage valuation done in advance to ensure speed of completion, but obviously costs are being incurred at this point.

Silvercar makes a sensible suggestion and many a buy to let investor use residential funds initially and then can remortgage out in 6 months as capital raising and take advantage of the increase in value due to any works undertaken..

Remember when buying at auction, you will only get a mortgage if the valuation says it is habitable, typically has running water, working kitchen and bathroom.

Good luck....

Many thanks Dave (and silvercar).

I am reasonably au-fait with the auction process, but am just investigating finance alternatives.

The remortgage option is one I've already checked out. It is especially useful, as it can be drawn down quickly once the sale is confirmed. Co-timing in this manner also provides the beauty of offering proof of funds and interest payments to the Inland Revenue.

Problem is that we may want to upsize next year (more little mouths to feed), so Mrs nollag and I may want to keep our powder dry for a while.

I've approach my usual BTL lenders and also spoke to London & Country, but none of them seem to handle auction properties. Are there any specialist brokers I should look at?

Thanks

nollag2006

Wutang wrote: »

Have you read your own signature?

Yes.

I've read your signature too, and it's very nice.

Dave_Ham

I do not get it...!

I can only assume that where L&C are fee free (and only paid on completion) they do not want to run the risk that they put the work in and it does not go anywhere...?

That is speculation though, as I do not know why they would tell you that.

I have done countless auction properties and there are no real restrictions, just as I said in my other post a bit of risk on your part.

I would still try and have the mortgage valuation done in advance, so your biggest risk is therefore the cost of the valuation..

The minute you look at specialists (or those that pretend to be) you tend to pickup unneccessary costs.

Good luck

Thrugelmir

Best to have the funds ready at your disposal.

Until you are committed to purchase the property then the application from the lenders perspective is subjective.

The_J

Personally, I would not want to broker an application that is under such time pressures but I know others would be happy to.

For me, auction properties are for cash buyers.