Property Auction

missslbell

I´m looking at buying a house at auction, to be used as Buy to Let

I have cash for the purchase and because its auction won´t be able to raise mortgage finance (utilities switched off and 15 day completion)

Is there any way of buying the house using a company structure or me giving cash to a (very good) contact, to then later buy it from them at the same price when it would be mortgagable

da_rule

You could buy it yourself and then mortgage it? If there is a tenant then a mortgage company should lend on it, and depending on the amount of money you want to raise from the mortgage they may lend without the mortgage if they think you can make the payments and there is enough equity in the property. Does raise the question though, if you can afford to buy it out right why don't you want to?

Doozergirl

Why don't you buy it with the cash and then re-mortgage it when there isn't a deadline to meet?

missslbell

Thanks for the answers;

Live overseas and therefore have a very limited number of available lenders, none of which currently look at incumbent mortgages. I won´t always live overseas so re-mortgaging could happen in medium term. But I´d rather mortgage up front at todays rates.

In terms of wanting to mortgage the property at all, it makes sense I have no other debt (i.e its not an unreasonable risk in context of my age/portfolio) and the interest would be an allowable expense

Doozergirl

I think you're better off trying to find the right mortgage product. Have you definitely searched the entire market? I'd post on the mortgages board and change the thread title for them.

missslbell

Definitely searched the whole of market combination of living overseas and location of the property means there is only 1 lender, don´t currently offer incumbent properties

eddddy

Hi missslbell

A couple of thoughts:

Check whether your proposed lender has a rule that the seller must have owned a property for a minimum of six months, in order to offer you a mortgage. And if so, are you happy to wait 6 months?

Is the property over the Stamp Duty threshold? If so, you will have to pay the duty twice (as well as two lots of legal fees).

anselld

missslbell wrote: »

In terms of wanting to mortgage the property at all, it makes sense I have no other debt (i.e its not an unreasonable risk in context of my age/portfolio) and the interest would be an allowable expense

It does not make sense to have a mortgage just because it is an allowable expense. It only makes sense if you can invest the capital released by the mortgage at a higher (net) return than the mortgage interest rate. ( which seems unlikely for a BTL).