Mortgages for auction properties??

0tter

Hi there, I wondered if there was anyone out there who could kindly help.

I'm looking to purchase a house at auction (guide price of £119k) and wondered if anyone knew the restrictions on getting a mortgage (for as much as possible)... in place before the auction.

First of all I can only raise £15k (17k at a pinch) deposit and wondered if that would limit my mortgage providers to zero or whether there was anyone out there that could cater to my needs.

Would I also need to get the mortgage providers consent prior to the auction to bid on the particular property and if so would they expect a surveyors report.

I need to get as much in hand as possible as I think it would go above the £119k and I could imagine it going on to £140k+ with a following nasty wind, so is the prospect looking more and more unlikely???

I have a flawless credit history, I'm in a good job and I've worked for 25 years in the same company and my income is around £31.5k a year, so am I dreaming or is there anyone out there who could cater to my needs.

Should I seek a financial broker, mortgage specialist or is it simple enough to go it alone.

Thanks in anticipation.

B

holly_hobby

If you are succesful at auction, its generally 10% on th day, and 20 - 28 days to complete the purchase.

This means that to give yourself the best chance of completing within the timeframe (notwithstanding it may go above your ceiling on the day), is to have a full DIP (ie full status checks already performed)with a mge lender already in place, so that you'll know the max you can borrow, and only need to have the survey completed once the auction has taken place.

The issues you may have (if you haven't already had a survey done pre auction to give you an idea on value/issues) is that the propety doesn't value up (within max ltvs) or has retentions, on your mge lenders survey, which means you'll have to throw extra cash in that you may not have access to (assuming its not a full retention !).

Personally if your capital is restricted and/or a mge is reqd, buying at auction isn't necessarily the best way to go about purchasing - given the fact that most properties listed are there because they are issues (strucutal or otherwise) or are repo's where the mortgagee has had difficulty overtime in selling on in the open market.

If you want to go ahead, a broker is certainly your best bet, esp if you are a FTB, and/or have little purchasing/auction experience - and I would have the appropriate searches carried out with your conveyencer before you start bidding - as once you have pch the property at auction it is a legally binding contract.

Hope this helps

Holly

0tter

Thanks Holly, that's really useful information.

My other half is an architectural tech' and reckons that the place looks very sound, to me - from the pictures - it appears to be somewhere that's very dated but has had love lavished upon it. The reason for the price is probably that it needs a complete facelift to bring it into this century. Me though, I'm not too bothered about this, it's a spectacular property for the price and I wouldn't mind doing things slowly and living circa 1950 for a while wouldn't represent a problem.

I think I'll get the mortgage sorted out in advance, but what would you reckon to a specialist advisor, should I be looking for a mortgage/finance/whatever advisor and do you reckon that anyone would offer a mortgage on an auction property with only a 10% deposit?

Thanks again for your help...

Cheers

holly_hobby

With respect, an architect isnt a surveyor, and what they believe to be a sound property to a qualified surveyor is not.

Such things that may causes issues, given that its in a time warp, is that it may need re-wiring, damp proof courses, there could be rot (wet and/ or dry), roof issues, structural issues, etc, etc, - and these are the issues that will cause a sureyor to request expert reports and result in delays and possible retentions (full or partial).

So to proceed to auction, without having it pre-surveyed (given the issues if you win and can't complete at all, or within the timeframe), would be nieve and hopeful in my opinion.

There are 90% deals about, subject to status of course.

Whether you employ a broker is of course your own choice, but if you have little expereince in this area, I do feel it would benefit you and potentially save heartache and time .... choice is yours of course.

Hope this helps

H x

Brock_and_Roll

I think the OP will find that the guide price is set artificially low to attract interest - a bit like the old ebay "99p start price no reserve"! As the OP suspects, the actualy price could go £30k+ higher.

Unless you are a cash buyer, I would give auctions a miss - if you need a mortgage you will already be £££ down by the time the bidding starts with no guarantee of winning.

0tter

holly_hobby wrote: »

With respect, an architect isnt a surveyor, and what they believe to be a sound property to a qualified surveyor is not.

Such things that may causes issues, given that its in a time warp, is that it may need re-wiring, damp proof courses, there could be rot (wet and/ or dry), roof issues, structural issues, etc, etc, - and these are the issues that will cause a sureyor to request expert reports and result in delays and possible retentions (full or partial).

So to proceed to auction, without having it pre-surveyed (given the issues if you win and can't complete at all, or within the timeframe), would be nieve and hopeful in my opinion.

There are 90% deals about, subject to status of course.

Whether you employ a broker is of course your own choice, but if you have little expereince in this area, I do feel it would benefit you and potentially save heartache and time .... choice is yours of course.

Hope this helps

H x

That helps a lot, yes I appreciate that she's not a surveyor I just value her judgement more than mine, though I have spent a lot of time renovating very large old buildings.

I think it looks solid (on the piccies) and the d!cor is just perfect, it looks straight out of immaculate 50's film set. The garden is perfect too, I just get a good feeling.....

However in order to speed up the process I reckon that a surveyor would be deffo on the cards, so once I've viewed and I'm happy then I'll see about mortgages and check out the surveyor too.

The mortgage is the lynch pin, no mortgage then no need for a surveyor, I just need to know if anyone has ever been through this process too.

Thanks awfully for the advice though, really very helpful for you to put this together for me.

Cheers B

0tter

Brock_and_Roll wrote: »

I think the OP will find that the guide price is set artificially low to attract interest - a bit like the old ebay "99p start price no reserve"! As the OP suspects, the actualy price could go £30k+ higher.

Unless you are a cash buyer, I would give auctions a miss - if you need a mortgage you will already be £££ down by the time the bidding starts with no guarantee of winning.

I'm hoping that 30k would be the maximum, that's without seeing it though as on paper it does look the bargain of the century.

99p no reserve now that would be good, I could arrange a car crash to close off the route to the auction, then it's up to me to bid it past the £1 mark

I wish I was a cash buyer and I know it's a risk but I've been a bit of a risk taker in the past and sometimes its paid off big time.

Thanks though that's very useful too and I appreciate any time that anyone takes to help me out.

B

Thrugelmir

0tter wrote: »

The mortgage is the lynch pin, no mortgage then no need for a surveyor, I just need to know if anyone has ever been through this process too.

With auction properties you ideally need to spend money upfront, there in lies the risk. Have your homework done. Being outbid is the nature of the game.

opinions4u

My advice is to leave it to cash buyers.