Borrowing agiansgt an unencumbered property

Julie3008

Hello, I'm new to this so please bear with me.  My husband and I own our home valued at £225,000, with no mortgage.  We'd like to buy another property as a long term investment for our children (currently 15 and 12 yo).  We have found an auction property with a starting bid fo £125,000 and want to borrow against our house to pay for it.  I've been round and round the internet and am now thoughly confused.  Am I remortgaging?  Can I borrow against our house for an auction property?  I cant seem to find a lender 's website that takes into account that we have no mortgage.  Many thanks in advance!

kingstreet

Yes. It's a remortgage of an unencumbered property and purchase of another property should be an acceptable use of the funds.

AnotherJoe

Julie3008 said:

Hello, I'm new to this so please bear with me.  My husband and I own our home valued at £225,000, with no mortgage.  We'd like to buy another property as a long term investment for our children (currently 15 and 12 yo). 

https://www.theguardian.com/money/2020/feb/08/britains-buy-to-let-boom-is-over-we-should-rejoice

Whats_your_forte

AnotherJoe said:

Julie3008 said:

Hello, I'm new to this so please bear with me.  My husband and I own our home valued at £225,000, with no mortgage.  We'd like to buy another property as a long term investment for our children (currently 15 and 12 yo). 

https://www.theguardian.com/money/2020/feb/08/britains-buy-to-let-boom-is-over-we-should-rejoice

It's in the graduian, it must be true!

Key on this is the fact you are buying at auction and 10% needs to be paid on the day of the auction and all done within 28 days. Therefore you should be in a position of the remortgage offer in place and indeed ready to draw if indeed you need that cash for the day of the auction too.
Also, if the property is at auction, there is a reason! Far cheaper to sell through normal routes so make sure you carry out due diligence on the property such as your own survey.

[Deleted User]

Submit a full remortgage application prior to the auction.  Get the survey, financial assessment, credit assessment, legal work etc out the way.   It should take you maximum of a month to get all this done.   This should leave you in a position of being able to draw the funds via the remortgage solicitors with about 5 days notice.  
This is the only way i would ever go to an auction as a non cash buyer.  Any other way is too big a risk