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Buying a property \u2013 whether residential, commercial or unutilised \u2013 invariably requires external financing. There are quite a few mortgage products available out there that can help you raise the funds required to finance property acquisition projects.
\nThese, however, aren\u2019t always what the need of the hour demands. In the eyes of many investors and businesses, the best time to buy a property is when it is being foreclosed or auctioned. This is a great idea, as such properties are usually available at a price point that hovers below the market prices. But financing the purchase of such properties with old-school mortgages isn\u2019t just unrealistic, it\u2019s entirely impossible. An auction bridging finance package aims to answer the questions posed by time-sensitive funding problems.<\/p>\n
At Commercial Finance Network, we collate, curate and combine the best asset finance deals from an exhaustive panel of whole of market lenders to match your requirements.[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”container” padding_top=”” padding_bottom=”” css=”.vc_custom_1444505165647{margin-bottom: 0px !important;padding-top: 10px !important;}”][vc_column][vc_separator color=”#e2e2e2″ type=”normal” thickness=”1″ up=”” down=”” el_class=”dotted”][\/vc_column][\/vc_row][vc_row type=”container” padding_top=”” padding_bottom=”” css=”.vc_custom_1444505155795{margin-bottom: 0px !important;}”][vc_column][vc_column_text]<\/p>\n
An auction finance package is a bridging loan designed specifically around the requirements of an auction property buyer.
\nBeing a bridging loan at its core, every auction finance package can be treated as a specialty short-term mortgage. The usual repayment tenure that lenders prefer for such bridging loans can be anywhere between 6-12 months. The interest is payable on a monthly basis. Most lenders also usually agree to waive the early repayment charges.[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”container” padding_top=”” padding_bottom=”” css=”.vc_custom_1444505165647{margin-bottom: 0px !important;padding-top: 10px !important;}”][vc_column][vc_separator color=”#e2e2e2″ type=”normal” thickness=”1″ up=”” down=”” el_class=”dotted”][\/vc_column][\/vc_row][vc_row type=”container” padding_top=”” padding_bottom=”” css=”.vc_custom_1444505155795{margin-bottom: 0px !important;}”][vc_column][vc_column_text]<\/p>\n
There are many factors that make an auction bridging loan a more useful financing tool than regular mortgages.<\/p>\n
Other mortgage products work around the valuation of the property and the available collateral. On the other hand, an auction finance package can base itself entirely around the collateral. So, if you\u2019re buying a property at an auction, and the lender doesn\u2019t agree with its valuation, you can still manage to get a bridging loan, if you can put up another property as a collateral.<\/p>\n
Regular property mortgages require lengthy paperwork to fall in place before you see the funds in your account. If it\u2019s a utilised property, renewal of planning permissions further lengthens the entire process. Auction bridging finance usually bypasses all these hurdles, immensely increasing the accessibility of funds for borrowers.<\/p>\n
We\u2019ve saved the most important bit for the last.<\/p>\n
If you\u2019ve ever taken a property mortgage in the past, you\u2019d know that months pass before you can use the funds. This period of waiting makes such mortgages utterly useless for auction purchases. An auction bridging loan can be processed within days, allowing you to come good on the AIP you enter into at auctions. We will be talking more about this in the following part of this article. [\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”container” padding_top=”” padding_bottom=”” css=”.vc_custom_1444505165647{margin-bottom: 0px !important;padding-top: 10px !important;}”][vc_column][vc_separator color=”#e2e2e2″ type=”normal” thickness=”1″ up=”” down=”” el_class=”dotted”][\/vc_column][\/vc_row][vc_row type=”container” padding_top=”” padding_bottom=”” css=”.vc_custom_1444505155795{margin-bottom: 0px !important;}”][vc_column][vc_column_text]<\/p>\n
To understand how auction bridging finance works, it\u2019s important to first understand how property auctions work.<\/p>\n
As one can observe, the entire process is time-sensitive. Failing to complete the purchase within 28 days forces the highest bidder to forfeit their security deposit. Therefore, it\u2019s very important to know that your auction finance application meets the approval, and the funds become available with enough time to spare. [\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”container” padding_top=”” padding_bottom=”” css=”.vc_custom_1444505165647{margin-bottom: 0px !important;padding-top: 10px !important;}”][vc_column][vc_separator color=”#e2e2e2″ type=”normal” thickness=”1″ up=”” down=”” el_class=”dotted”][\/vc_column][\/vc_row][vc_row type=”container” padding_top=”” padding_bottom=””][vc_column][vc_column_text]<\/p>\n
Commercial Finance Network, being a leading whole of market broker in the UK, has all the resources needed to help you finance your auction property purchases. Working closely with lenders who specialise in turning around bridging loan applications within days, we make sure that your wise investment moves reach a profitable conclusion.<\/p>\n