BtL mortgage for auction property?

Bluebell1000

There's a property coming up for auction shortly. We are interested but some of our cash is tied up in another btl property, which is in the process of selling now. We were wondering about the feasibility of getting a buy to let mortgage (we have about 40% deposit is available now) to buy the auction property, as we can't be sure our sale will go through in time. The auction has an 8 week completion deadline - is that achievable with a btl mortgage, or would we really need the cash before we could consider it?

eddddy

It's super risky to bid at auction if you don't have a firm mortgage offer on the property you're bidding on.

(i.e. you have paid the mortgage application fees, paid for the survey, paid the legal fees, and got the firm offer - and you would lose the fees if somebody else outbids you.)

And bear in mind that many (most?) properties that go to auction are unmortgageable.

A better option might be to arrange auction finance or a bridging loan - and pay it off when the other property sells or you manage to secure a mortgage.

Bluebell1000

Thanks, unfortunately the property has just been sold prior to auction anyway

G_M

For the future, you need to have your mortgage arranged before you bid, unless you can pay for the property outright in cash.

Bluebell1000

Cheers, next time the auctions come around we should have cash anyway, if we see anything that we like the look of!