Bridging Loans for Auction Properties

Unlock Immediate Funds for Your Auction Property Purchase

Looking to grab that perfect auction property? Get started with our Bridging Loans for Auction Properties!

Lightning-fast finance: from £50,000 to £25 million.
Unbeatable rates: starting at just 0.55%.
Flexible terms: 3 months to 3 years to suit your needs.
Speedy service: funds possible in 5-7 working days.

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Contact us today to unlock the potential of your property investments with the right bridging loan solution. Your successful property venture begins here.

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What is an auction bridging loan?

An auction bridging loan is a short-term finance solution designed to help buyers complete the purchase of a property bought at auction within the typical 28-day completion deadline.

This type of loan acts as a ‘bridge’ between purchasing at auction and securing longer-term financial arrangements. It is typically used when buyers need more funds to complete the purchase or wait for approval for longer-term financing.

What are the benefits of auction bridging loans?

Opting for an auction bridging loan provides numerous advantages:

SPEED: With our expert guidance, securing finance can be quick, often meeting the urgent deadlines that auction purchases demand.
FLEXIBILITY: Tailored solutions that respect your unique circumstances and investment goals.
ACCESS TO A WIDE NETWORK OF LENDERS: This ensures you receive the most competitive interest rates and loan terms.
PERSONALISED SERVICE: Our advisors guide you through every step, ensuring a smooth path from appraisal to approval.

Why choose expert mortgage brokers for your auction bridging loan?

Expert Mortgage Brokers has a team of experienced and knowledgeable brokers specialising in providing financial solutions for buying auction properties. Here’s why we are the trusted choice for many home buyers and property investors:

EXPERTISE: Our team has in-depth knowledge of the auction process, allowing us to provide tailored solutions that meet your specific needs for buying property.
SPEED: Understanding the time-sensitive nature of auctions, we work quickly to secure funding within the tight completion deadlines, helping you repay the loan efficiently.
FLEXIBILITY: We assist you in acquiring flexible loans, with options for interest-only payments and no early repayment penalties. This gives you the freedom to structure your loan according to your needs and ensures you can effectively manage to repay it.
COMPETITIVE RATES: We work with various lenders to offer competitive rates to ensure you get the best deal for your auction property purchase, making buying and planning to repay the loan more accessible.

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Ready to jumpstart your property auction journey?

With us, you can unlock the door to quick, flexible financing for your next auction purchase. Turn your property ambitions into reality.

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The application process for auction bridging loans

Our streamlined application process ensures transparency and efficiency:

INITIAL CONSULTATION: Discuss your finance needs and auction property details with our expert advisors.
PROPERTY APPRAISAL: Understand the loan amount you can access based on the property’s purchase price and financial situation.
APPLICATION SUBMISSION: We’ll help you gather and submit all necessary documentation to the most suitable lender.
APPROVAL & FUND RELEASE: Once approved, funds are typically released quickly, allowing you to complete your auction purchase confidently within 28 days.

Types of property you can buy

Bridging loans for auction finance can be used to purchase a wide range of property types, including:

Residential properties

Houses.
Flats.
Apartments.

Commercial properties

Retail spaces.
Offices.
Industrial units.
Mixed-Use Properties.
Properties with both residential and commercial elements.

Unmortgageable properties

Properties that do not meet standard mortgage lending criteria.

How much deposit do you need for an auction bridging loan?

For an auction bridging loan in the UK, the deposit required typically varies depending on the lender and the specific circumstances of the loan.

However, in most cases, a minimum deposit of 25% is required. This is because auction bridging loans are designed to provide short-term financing for property purchases at auctions, where the buyer needs to complete the purchase within a tight deadline. The deposit is usually deducted from the loan amount and is repaid along with the interest and any other applicable fees at the end of the term.

Sometimes, the lender may require a lower deposit, but this is only occasionally true. It’s essential to check with the lender or a specialist finance broker to determine the specific deposit requirements for your auction bridging loan.

Auction bridging loans: how much will it cost?

The cost of an auction bridging loan in the UK can vary depending on several factors, including the lender, the loan amount, the property being purchased, and the borrower’s creditworthiness. However, here are some general costs associated with auction bridging loans in the UK:

ARRANGEMENT FEE: This is typically a percentage of the loan amount, ranging from 0.5% to 2%. For example, if the loan amount is £100,000, the arrangement fee could be £500 to £2,000.
INTEREST RATE: This can vary from 0.43% to 1.25% per month, depending on the lender and the borrower’s credit profile. For example, if the loan amount is £100,000 and the interest rate is 0.75% per month, the monthly interest would be £750.
VALUATION FEE: This can range from £0 to £200, depending on the lender and the property’s value and condition. For example, if the property is valued at £200,000, the valuation fee could be £100.
DRAWDOWN FEE: This is typically around £500, charged by the lender to access the loan.
EXIT FEE: This can range from 1% to 2% of the loan amount, charged by the lender when the loan is repaid.
BROKER FEE: If you work with a broker, their fee can range from 0.5% to 2% of the loan amount.
SURVEY/VALUATION FEES: These can vary depending on the property’s value and condition but typically range from £300 to £900.
LEGAL FEES: These can vary depending on the complexity of the transaction but typically range from £500 to £2,000.
ADMINISTRATIVE FEES: can vary depending on the lender but typically range from £25 to £100.
OTHER FEES: Additional fees associated with the loan, such as late payment or early repayment fees, can vary depending on the lender and the loan terms.

It’s essential to carefully review the loan terms and conditions before signing agreements to ensure you understand all the costs involved.

FURTHER READING:

How much can I borrow for an auction property?

The loan amount is generally determined by the property’s value at auction and your financial standing. We have secured loans ranging from minor property purchases to substantial commercial investments.

In the landscape of property finance, particularly when buying a property at auction, the knowledge and expertise of Expert Mortgage Brokers can be the crucial difference in securing your desired property. Our insight into auction finance, bridging finance, and the intricacies of lender requirements ensures we can offer tailored advice and solutions.

Whether it’s a residential or commercial property, we aim to empower you to complete your purchase, guided by transparent communication and personalised service every step of the way.

Take advantage of your next investment opportunity. Contact our expert bridging loan brokers today and make your property at auction dreams a reality.

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How long does it take to arrange an auction bridging loan?

The timeframe for securing an auction bridging loan in the UK can fluctuate based on various factors, such as the lender’s policies, the borrower’s creditworthiness, and the intricacies of the transaction.

It’s pivotal to have the finance arranged and sanctioned before the auction day to guarantee the availability of funds for the acquisition. Generally, arranging auction bridging finance could take 7 to 14 days, though this period can be expedited if required.

Here’s a brief overview of the steps involved in securing auction bridging finance and the usual timeline for each:

INITIAL APPLICATION: 1-2 days – The borrower provides an initial application to the lender detailing basic information about the property to be acquired at the auction and the financing needed.
VALUATION AND DUE DILIGENCE: 2-5 days – A valuer appointed by the lender assesses the property’s market value, and the lender carries out due diligence to confirm that the property meets their criteria for auction bridging finance.
LOAN OFFER: 1-3 days – After assessing the valuation and due diligence findings, the lender presents a loan offer to the borrower, specifying the terms and conditions of the auction bridging finance.
LOAN APPROVAL: 1-2 days—After the borrower accepts the loan offer, the lender finalises the approval for the auction bridging loan.
Funds Release: 1 day – The funds are made available to the borrower, typically on the auction day or shortly after that, enabling them to complete the purchase of a property at auction.

To ensure a timely loan arrangement, the process must be initiated at least 7-10 days before the auction day is advised. This preparation addresses any unforeseen delays or complications, ensuring the borrower can successfully purchase a property at auction with the support of auction-bridging finance from the auction house or lender.