Fast mortgage offer needed for auction purchase!

catt_2

How fast could we get a mortgage offer?

We have found a house which we intend as our home. It is going to auction on 19 April. We have funds available to pay to deposit of 10% on exchange of contracts on the day of auction.

We need to know before the auction date that we will get a mortgage on the house before we commit to purchase by bidding on it. We are looking for less than 60% loan to value. My partner wants to keep his flat, which is subject to a small mortgage, and let it out. A letting agent has advised us of the level of rent and it would more than cover the mortgage and all outgoings.

Where do we start?!

Mr_helpful

A fee free broker and an agreement in principle and preferably a valuation but you may not want this to be done as its money down the drain if you dont get the house, though its deposit down the drain if it fails valuation.

millsy1980

I come across this a lot at present as I work for a lender. The 28 day turn around time is a problem and includes non working days as well I believe! The point Mr Helpful makes about a valuation is vital. Lenders will value a property up front for you but will require payment. If you bid is unsucessful then you lose you val fee, but it would be a lot less than losing a 10% deposit. Don't leave it until you bid is sucessful and then make an application because lenders will not guarantee that they can fit within a 28 day turnaround, especially if the property needs some work as this could cause the process to be slow in itself.

hmmthinking

Think you would need to get a bridging loan to pay in time. But only if your pretty definate that your mortgage will come through at some point. As bridging loans give you a lot of cash soon but at high interest rates I believe. That's how a friend of mine bought at auction.

Mr_helpful

its not difficult to get a mortgage offer out in time for a 28 day completion

MortgageMamma

Abbey are very good for auction properties in my experience but you may not fit their lending critieria so make sure you deal with this through a broker who is experienced in auction purchases

silvercar

Have a look on singingpig.co.uk, there are many people on there who need mortgages and legal work completed very quickly for a variety of purposes.

There are packagers who will sort out the legals, survey, searches and mortgage for you and are used to working to tight deadlines.

(With a loan to value of only 60%, its not going to be the valuation thats the worry - more likely the survey or legals.)

millsy1980

Mr_helpful wrote: »

its not difficult to get a mortgage offer out in time for a 28 day completion

Didn't say it was difficult just that lenders will not guarantee it, therefore they are not accountable for any loss on the client's behalf should circumstances deem it not possible to complete in the normal timescales of an auction property. Just trying to let the OP now what it can be like, especially if the property is not in good nick, which can happen with auction properties. It only needs an over fussy surveyor to start asking for numerous specialist reports for a delay to occur.

herbiesjp

If the auction is on the 19th I would suggest getting the mortgage process started asap.

Get the valuation done asap - as you will need to know the state of the property. That is one of the risks of auction properties - forking out for a survey and then not getting the property, however as has been stated above, its a lot better to lose that rather than the 10% deposit

That way you can have a formal mortgage offer letter issued very quickly after the survey.

Don't forget it is not the mortgage offer that may slow the process but the legal work - so you will need to make sure everyone knows the timescales from day1

HTH

Discocat

Hi. I can only speak from my own recent experience but I have found the Halifax to be very good. I made an offer on a property on the Tuesday, applied to the Halifax over the telephone on Friday (6.15 pm), survey was carried out on the following Tuesday with the mortgage offer being faxed to my Solicitor on the following day, Wednesday. A total of 8 days between making the offer on the property and receiving my mortgage offer. I was extremely impressed with their service and my EA assures me that this timescale is very often the case with the Halifax.

MortgageMamma

Yes, the service from Halifax is very good. in circumstances like an auction its important to make sure no questions are missed off the application and then lender has seen copies of all ID etc required to keep thigns moving quickly, you wouldnt think so but even something as simple of a badly copied wage slip can hold up the whole process

MM