Auction Finance Q&A's

Not necessarily. It is more effective when property, time, and exit strategy fit well together. It is not always ideal if:

• The exit strategy is unrealistic to meet or seen as too hypothetical
• There are legal or title issues in the property
• The loan-to-value ratio is too high
• Preparation is left until after the auction

It is imperative that you evaluate finance before placing a bid.

The costs are not standard and vary based on the property, the amount borrowed, and the term in which you require the funds. Such fees may include:

• Monthly Interest
• Arrangement Fees
• Valuation, legal, and solicitation costs

Your prices are going to vary depending upon the LTV needed, the condition of the house, the strength of your exit strategy, and how quickly you need the funds.

Just make sure that you verify all costs before moving forward.

Yes. Sometimes auction finance can be used for properties that regular mortgages can’t buy.
To this effect, the following properties apply:

• In poor condition
• Of non-standard construction
• Vacant or uninhabitable

The aim is that the property will then become mortgageable within the context of the exit strategy.

In simpler cases, the whole procedure can be completed in days. This is based on the following factors:

• Quality of the auction legal pack
• Rate at which the valuation cycle turns around
• Ambiguity of the exit strategy
• The responsiveness of all parties

Having all the documents prepared before an auction helps greatly in achieving a quick auction finish.

Are alternative modes of funding available?
Based on your case, other possibilities may be:

• Cash purchase
• Pre-arranged Bridging Finance
• Specialist refurbishment finance
• Conventional mortgage (if timing is favorable)

Every option has its own set of risks and appropriateness with regards to the timeline of the auction.