Buying at auction with a mortgage?

dannim12345

Maybe I've been watching too much Homes under the Hammer but I've seen a property I like which is being sold at auction.

The house is habitable (central heating & double glazing) but from pictures look like it is the roof must be leaking & is in poor decorative state/a mess. I'm going to have a look at it tomorrow.

I have a mortgage at the moment (the property I was buying has fallen through) but this ends at the end of September and the auction isn't until October. You can offer before the auction but the legal pack isn't available until the day according to their website.

How is best to proceed? Organise another MIP? Get a valuation done before? Would it be worth looking into a bridging loans just in case the mortgage takes a while? I didn't have an problems getting a mortgage quickly before (after MMR).

Thanks

bris

No, auction is a different ball game, make sure you have a mortgage in place and most importantly you solicitor gets hold of the legal pack before you bid.

The legal pack can have you responsible for debt on the property and remember you only get 28 days to complete so it's important to have funds in place.

PasturesNew

The mortgage you have at the moment would be useless to you anyway. A mortgage is dependent upon the person (you), a specific property and other criteria dependent upon the time it was offered.

You'd need a new mortgage - and you have to get that arranged before the auction. That means you have to get it surveyed/valued, at your cost, before you walk into that room.

For this reason it is rare for somebody to buy a house at auction with a mortgage. Lots of up front costs and the first bidder might wade in at £10k above your top price.

dannim12345

Thanks for your quick replies - I understand it is rare. I will speak to my mortgage broker and see what he thinks and go from there. I understand my current mortgage offer isn't directly transferable, the property would need to be valued/surveyed etc.

I'm hoping the legal pack will be available online before the auction (it isn't at the moment) - I wouldn't consider bidding if its not available before the auction for my solicitor to review.

Thanks

G_M

Before you bid you must

* be sure the legals have been checked (so pay a solicitor)
* be sure you have the money (either in cash, or a confirmed mortgage offer, which requires a full application with fees paid)
* be sure of the condition of the property, either relying on your own eyes and competance, or by paying for a survey

If you bid, and fail to win, that money will be lost.

If you bid and win, you must buy, so if any of the 3 above shows a problem, you are ****ed.