Auction house and mortgage?

lazytomato

Hi guys,

I am just looking for some advice on behalf of my mother and I hope MSE forum could help.

Basically, my mum made an offer on this house which was accepted. Her mortgage application went through fine also (mortgage offer valid until Jun 13). However, when the bank did their house evaluation, they decided that the house does not worth its marketed value (needs work on damp, plumb and wires I think), and therefore no mortgage will be released. After failing to negotiate with the bank, the house owner decided to put the house on auction.

Our family really like the house and would very much like to win it on the auction. Our problem is that we don't know if we will have the same issue with the mortgage, where bank refuses to release mortgage due to the condition of the house.

Has anyone been in such situation or know anywhere that I might be able to get some information from? I have searched online and seem to have had no luck

Thanks in advance!

Kayalana99

lazytomato wrote: »

Hi guys,

I am just looking for some advice on behalf of my mother and I hope MSE forum could help.

Basically, my mum made an offer on this house which was accepted. Her mortgage application went through fine also (mortgage offer valid until Jun 13). However, when the bank did their house evaluation, they decided that the house does not worth its marketed value (needs work on damp, plumb and wires I think), and therefore no mortgage will be released. After failing to negotiate with the bank, the house owner decided to put the house on auction.

Our family really like the house and would very much like to win it on the auction. Our problem is that we don't know if we will have the same issue with the mortgage, where bank refuses to release mortgage due to the condition of the house.

Has anyone been in such situation or know anywhere that I might be able to get some information from? I have searched online and seem to have had no luck

Thanks in advance!

Not done this myself but my Dad told me that with auctions you have to sign something thier and then (I belive thier is a deposit to be paid) saying you will buy it within 4 weeks or something, he advised me not to go through the auction route unless paying cash or had a very strong backing mortage company and even *if* we did, we should check with the seller/auction company of the house before bidding.

Sorry if this is a little vauge as I said I have no experiance myself so I wouldn't take it to heart, maybe someone will come and tell me if Im right/wrong.

Annisele

If the seller has decided to sell at auction following problems with a mortgage company, it's possible the house isn't mortgagable at all - and so only suitable for cash buyers.

Buying at auction is a risky proposition for people who need a mortgage.

G_M

Either you pay cash at auction, and end up with the property in whatever state it is in.

Or you bid, win, apply for mortgage, get turned down by bank, and lose 10% of the house price for failing to abide by contract.

Or you apply for mortgage, get turned down, so do NOT bid at auction.

Or you apply for mortgage get it agreed, bid, lose out to higher bid, and lose mortgage fees.

Or you apply for mortgage get it agreed, bid,..... and win.

kingstreet

Lenders usually ask for reports and estimates for any essential repairs. Get the reports and estimates, submit them to the lender and see if the retention is reduced, or removed altogether.

You could then go to the auction with a mortgage offer in hand. You should still have your solicitor view the legal pack at the Auctioneer's office before the day of the auction to ensure there are no issues with the title.