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Mortgages for Auction Property

Providing all types of mortgages for residential, buy to let, and commercial auction properties.

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Can I get a mortgage on an auction property?

Yes, you can, there are various reasons why a customer would need to take out a mortgage on an auction property, these include:

  • Buying an investment at auction.
  • Residential property purchase at auction.
  • Commercial occupier or investor purchases.
  • Buying un-mortgageable property.
  • Anything else or it’s complicated?

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The 4 types of auction property mortgage

There are 4 main types of mortgages available for auction properties, these are:

As an independent mortgage broker, we can advise on all the options available to you.

Which product will be best for you will depend on your individual situation, what you are looking to do with the property, its condition, its type, and the completion speed required.

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Mortgage advice for auction property.

Our experienced and trusted independent mortgage team will ensure that recommend the best product for your situation.

Here are some of the benefits of using us:

  • Fast and responsive service.
  • Free, no-obligation consultation.
  • All mortgage products considered.
  • In-depth knowledge of lending criteria.
  • Receive a dedicated case manager.
  • Mistakes can be costly, avoid unnecessary costs.

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Auction Property Mortgage FAQs

How do I get a mortgage for auction property?

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Securing a mortgage for a property purchased at auction requires careful preparation. Begin by obtaining a mortgage in principle (MIP) before the auction.

This document indicates how much you can borrow and reassures auctioneers of your serious intent. Once you identify a property, arrange for a survey and valuation to ensure it meets lender requirements.

Not all lenders finance auction properties, so seek out those specialising in auction finance.

If a traditional mortgage is unattainable within the auctions’ tight timeframe, consider a bridging loan, which can be converted into a standard mortgage later.

Additionally, instruct a solicitor to review the legal pack provided by the auction house to identify any issues that could affect your mortgage approval.

How do I prepare for an auction before my mortgage?

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Preparation is key when buying property at auction.

Before the auction, thoroughly research the properties you are interested in and arrange viewings.

It’s important to obtain a legal pack for each property, which includes vital information such as title deeds and any restrictions.

Additionally, having your finances in order is essential.

This means having a mortgage in principle and enough funds for the deposit, which is typically 10% of the purchase price, ready on the day of the auction.

What happens after you win at a property auction?

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After successfully winning a bid at auction, the process moves quickly.

You will need to finalise your mortgage application and provide any required documentation to your lender.

The lender will conduct a property valuation to confirm the property’s value aligns with the loan amount.

How do I get a mortgage in principle for an auction property?

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You can get a mortgage in principle by speaking with one of our mortgage advisors who will assess your financial situation and provide a decision.

This involves a preliminary check of your credit score, income, and expenses.

Getting a mortgage in principle not only strengthens your position as a bidder but also gives you a clearer idea of your budget, helping you bid confidently within your financial limits.

Can you bid on a house at auction without a mortgage approval?

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Bidding on a house at auction without prior mortgage approval is possible, but it carries significant risks.

Auctions require completion within 28 days, so having a mortgage in principle or pre-approval greatly enhances your chances of meeting this deadline and securing the property.

Without mortgage approval, you may struggle to finalise the purchase in the required timeframe.

What happens if I can't get a mortgage after winning an auction bid?

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If you fail to secure a mortgage after winning a bid, you may lose your deposit and face additional penalties.

It’s crucial to have your finances in order before bidding.

To avoid this situation, it’s advisable to work with an experienced mortgage broker who can guide you through the pre-approval process and ensure you have backup financing options in place.

This preparation reduces the risk of financial loss and stress.

How quickly do I need to complete the purchase after an auction?

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Typically, you need to complete the purchase within 28 days of winning the bid.

This tight timeframe requires prompt action and efficient processing of your mortgage application.

Working with a dedicated mortgage advisor who understands the auction process can help streamline the paperwork and liaise with lenders to meet deadlines, ensuring a smooth transaction.

What is included in a legal pack?

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A legal pack usually includes the title deed, local authority searches, property information forms, and any restrictions or covenants.

Reviewing this pack thoroughly before the auction is essential, as it contains crucial details about the property’s legal status and potential issues.

Engaging a solicitor to go over the legal pack can provide additional assurance that there are no hidden surprises.

How does a modern auction work with a mortgage?

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In a modern auction, also known as a conditional auction, the process is slightly different.

Instead of needing to complete the purchase within 28 days, you secure the property with a reservation fee and have a longer timeframe, typically 56 days, to complete the purchase.

This extended period provides more time to arrange a mortgage, making it a more flexible option compared to traditional auctions.

Do I need a survey for an auction property?

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It is advisable to arrange a survey before the auction to identify any potential issues with the property.

A survey can uncover structural problems or necessary repairs that might affect your decision to bid or the amount you’re willing to offer.

Knowing the property’s condition in advance allows you to factor in renovation costs and avoid unexpected expenses.

What are the mortgage costs involved with buying at auction?

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When buying at auction, several mortgage-related costs can arise.

You’ll need to cover valuation fees for a professional valuation of the property, and survey fees for detailed property inspections.

Lenders may charge arrangement fees, which can vary significantly. Solicitor fees will cover the legal aspects of the mortgage and property purchase.

Auction properties might attract higher interest rates, especially if perceived as higher risk, and using a mortgage broker may incur additional fees for their services.

Can I view the property before the auction?

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Yes, you should arrange viewings before the auction to assess the property’s condition.

Viewing the property helps you identify any immediate concerns and assess its potential value.

Take note of any visible issues and consider bringing along a builder or surveyor for a professional opinion, ensuring you’re fully informed before bidding.

How can I get a mortgage on a commercial property at auction?

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To obtain a mortgage for a commercial property bought at auction, begin by getting pre-approved for a commercial mortgage.

This involves providing detailed financial statements, as commercial mortgage processes can be more complex than residential ones.

Work with lenders who have experience with commercial property auctions and are familiar with their unique requirements. Arrange for a professional valuation and survey to ensure the property meets the lender’s criteria.

Furthermore, prepare a solid business plan demonstrating how the property will generate income, as this is crucial for loan approval.

Finally, have a solicitor examine the auctions’ legal pack to ensure there are no legal issues that could hinder securing a mortgage.

What deposit do I need to buy at auction?

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When purchasing at auction, you typically need to pay a deposit of 10% of the property’s purchase price immediately after a successful bid.

Having these funds readily available is crucial, as failing to pay the deposit can result in losing the property and your deposit.

Can I get a mortgage for a property that needs renovation?

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Yes, some lenders offer mortgages for properties needing renovation, but specific conditions and valuations will apply.

Renovation mortgages often come with stricter criteria and may require detailed plans for the refurbishment work.

Working with a mortgage broker experienced in renovation projects can help you find suitable lenders and streamline the application process.

How do I get a mortgage on a un-mortgageable property?

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Properties considered un-mortgageable due to their condition or other factors require alternative financing options.

Renovation loans can provide funds for both the purchase and necessary repairs.

Bridging loans are another option, offering short-term financing to purchase and refurbish the property, which can then be remortgaged once it meets standard lending criteria.

Engaging with specialist lenders who are willing to finance unique or problematic properties can also be beneficial.

What are the risks of buying property at auction?

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Risks include not securing a mortgage, uncovering unexpected property issues, and losing your deposit if you can’t complete the purchase.

Thorough preparation, including legal and structural checks, mitigates these risks.

Additionally, having a clear financial plan and backup options can safeguard against potential pitfalls.

8 Reasons to Choose Us

Responsive service for auction properties, 7 days a week.

Our efficient processing ensures your mortgage application is handled swiftly, meeting tight auction deadlines.

Fast and free auction property mortgage advice.

Our team has extensive experience with auction property mortgages, providing you with informed guidance and strategies tailored to your needs.

You'll get your own dedicated case manager.

From preparation to post-auction, we're with you every step, offering continuous support and assistance throughout the mortgage process.

We're independent and work for you all throughout the process.

We offer tailored mortgage solutions to suit your unique financial situation and property goals, ensuring you receive the best advice.

All auction property mortgage situations considered.

Our clients consistently rate us highly for our exceptional service, highlighting our commitment to your satisfaction.

We'll shop around to find you the best deal.

We work with a range of lenders who understand auction purchases and can offer competitive mortgage deals.

We'll get you a mortgage in principle quickly.

We help you get a mortgage in principle promptly, enabling you to bid confidently at auctions.

Help with complicated situations.

We help you identify and mitigate potential risks, providing peace of mind as you navigate the auction process.

Auction Property Mortgage Considerations

Purchasing a Residential Property at Auction

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Secure a mortgage for your future home with confidence and ease.

Our advisors will guide you through the process, ensuring you have the right financial arrangements in place to complete your purchase smoothly and efficiently.

Buying a Buy-to-Let Property at Auction

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Obtain the right mortgage for your investment property.

We understand the unique requirements of buy-to-let mortgages and can connect you with lenders who offer favourable terms, maximising your investment potential.

Renovation Project Mortgages

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Find specialised mortgages for properties needing extensive renovations.

Whether you’re planning a major refurbishment or a simple update, we can help you secure the financing necessary to bring your vision to life.

Commercial Property Auction Purchases

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Navigate the complexities of commercial property mortgages with our help.

Our expertise in commercial lending ensures you receive the best advice and support to secure a mortgage tailored to your business needs.

Bridging Loans for Auction Properties

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Explore bridging loan options for short-term financing needs.

Bridging loans can provide the quick funds needed to complete your auction purchase while you arrange longer-term financing solutions.

Securing a Mortgage for a Listed Building

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Understand the nuances of obtaining a mortgage for listed buildings.

We offer specialised advice on dealing with the additional regulations and requirements associated with historic properties, ensuring a smooth mortgage process.

Mixed-Use Property Mortgages

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Get guidance on mortgages for properties with both residential and commercial use.

Mixed-use properties have unique financing needs, and we can help you find lenders who understand these complexities.

Handling Property Valuations for Auction Purchases

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Ensure accurate valuations to secure the right mortgage amount.

An accurate valuation is critical in obtaining the appropriate loan and avoiding over-borrowing or underfunding your purchase.

Dealing with Legal Issues in Auction Purchases

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Receive support in managing legal complexities associated with auction properties.

Our advisors work closely with legal experts to help you navigate any legal challenges, ensuring a smooth transaction.

Financing a Second Home Through Auctions

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Discover mortgage options for purchasing a second home at auction.

Whether it’s a holiday home or an additional residence, we can help you secure the necessary financing with competitive terms.

UK Moneyman Limited is Registered in England, No. 6789312
Registered Address: 10 Consort Court, Hull, HU9 1PU.

Authorised and Regulated by the Financial Conduct Authority.

We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk

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