Mortgage and Auction deposit

Dodi300

Hey,

Quick question, I'm looking into buying a property at an auction which requires a 10% (non-refundable) deposit when the hammer goes down. Is this in addition to the deposit the mortgage company requires to secure the loan, or is the 10% already paid taken into account?

Ideally I don't want to be putting down a 20+ % deposit initially.

Thanks.

Thrugelmir

Which lender is asking you to deposit money with them? The deposit is normally paid across to the vendor. The auction house is only acting as an intermediary for the vendor from what you've said. That's the way the majority of property auction houses work.

Dodi300

Ah, I see. I'm a first time buyer so I'm not entirely sure how this works - no lender has asked to deposit money with them though I was assuming that's how it works. I understand what you're saying now though.

So if that's the case, where the mortgage is concerned, paying the 10% deposit at the auction is the same as when buying through an estate agent? Therefore I won't be required to pay the 10% initially at the auction house and then an additional 10% later? I assume the lender is simply asking the amount I'm willing to put down as a deposit, which would be the 10% I had paid at the auction.

Thanks.

mrginge

FTB, auction, mortgage.

Three things that should never appear in the same thread.

Good luck!

betmunch

The 10% you pay at the auction is included in the deposit.

However to buy at auction with a mortgage you really need the mortgage fully agreed, not just an AIP, a full formal mortgage offer.

How long before the auction? And are you using a broker to sort out the mortgage, or going direct?