How bridging finance works for auction purchases
Typically a buyer will use their own funds to secure the property and pay down 10% of the purchase price on the day of the auction. As bridging loans can be put in place quickly, they are often used to fund the outstanding balance which is required by the date of completion - usually within 28 days.
This makes bridging finance ideal for auction purchases, not only because a standard lender is unlikely to complete within the 28 day time frame, but also because properties that are in a poor state of repair are unlikely to meet a traditional lenders lending criteria (for example no bathroom or kitchen), and as such bridging loans can facilitate buying properties that are in need of major works.
Our Auction team will fast-track applications relating to auction purchases to the most suitable and cost-effective lenders from our panel. This will ensure appropriate finance is arranged well within the completion period.
We do advise our clients to get in contact with us before the date of the auction. We are always keen to discuss the solutions we offer to auction property purchasers and the lending you can expect to obtain. Additionally, we have strong relationships with our large panel of lenders, and many are happy to provide us with a no obligation Decision in Principal, before you attend the auction.
To read about a Case Study from a recent Allsop commercial auction please click here
Please call us on 0207 206 2500 and we will be happy to have a no obligation discussion around the different ways one can finance property purchased at auction. We are also able to provide you with pre-approved terms which will give you confidence when bidding.