Getting a Mortgage for an Auction Property

Most people think auctions are a spontaneous business and buyers buy properties on a whim. You pop along to your nearest auction and see a property you quite fancy the look of, make an offer and go home a homeowner. What they don’t realise is there is quite a lot of preparation involved. It’s not something you decide to do on a Monday and have all sorted by a Tuesday. Buying at auction takes a lot of planning if you want to get it right. Indeed without such planning you could wind up making a very, very big mistake – a mistake that’s not easy to reverse. That is why you should think carefully before attending the auction and make sure everything is in place.

The Preparation

The preparation involved in the process of buying at auction is extremely important. If you do not want to make a mistake you must make sure you prepare correctly. View the property before you buy it. Do not buy before viewing as you will not know whether the property is up to scratch. The other part of the preparation – and probably the most important – involves the mortgage.

The Mortgage

When you buy a property at auction it is imperative that you get your finances in place before attending the auction. You will have to pay a deposit at the auction – this is not the worry as you could use savings or a loan. However you then only have 28 days to pay the remaining balance.

Anyone who has ever got a mortgage will know that it doesn’t happen quickly! Indeed the banks and building societies on the high street take quite a while to process and underwrite a mortgage. When you buy a property at auction you are legally obligated to pay the remaining balance within 28 days. There is no other option. Therefore it is vital to organise your mortgage before you go the auction.

Mortgage brokers are the best people to see when you want a mortgage as unlike bank advisers brokers are able to give you access to the whole of market products. The mortgage broker will help you to find the best product for you. Inform your broker that you want to buy a property at auction and you need the finance in place. He or she in turn will inform the lender – the bank or building society – and make sure the mortgage will be available to you in time.

Seeking financial advice is crucial whenever you are buying a property but even more so when you are buying at auction given the short time scale you are given. If your mortgage is not in place you could find yourself getting to the end of the 28 day period and not having the funds to pay for the property. Of course since the sale is legally binding you must find a way. To save yourself this hassle make sure the mortgage is in place. Speak to a mortgage broker and research the offer banks and building societies have. If your mortgage is in place the process should run smoothly. You do not want to find yourself struggling to make the deadline so always be prepared.