Was wondering if anyone has any advice.
Not landlord related but my son is looking to buy a house at auction.
He has a deposit but no idea on how about obtaining a mortgage.
How does he guarantee a quick turnaround on a mortgage as he doesn’t want to buy a property then not have the money available to complete.
You cant guarantee a mortgage will complete, especially within a limited time frame. Some specialist lenders can help. It comes with risk of losing deposit if doesnt complete. You will most likely pay a higher interest rate.
A bridging loan is one option. Drawback is huge interest, but only meant for short period of time. (not for the faint-hearted).
As Mark10 suggests, very difficult to get finance for an auction purchase as the timings just don’t work & the mortgage would be subject to a survey. He would need to secure funding first so personal loan, bridging loan, family & friends.
Buying at auction is also really high risk, especially for someone buying their first home - ask yourself why a property is going to auction. I would not recommend it. Look instead for something run down or a rental that a LL wants to shift quickly. A cheeky offer might get your son his cheap property, with a mortgage & less risk. Good luck.
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I have bought 3 places with pre auction bids and did very well. Not risky for me But did pay cash
Thanks everyone!
Knew I’d get good advice on here.
Looks like it’s not an option for him,
If anyone’s got any advice on a good broker would appreciate that.
I would start by looking at L&C online. They are free & have lots of useful tools you can play around with. You can then speak to them direst & they will guide you through the process. Good luck.
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I’m not sure a mortgage is suitable for auction properties. He may have to buy in the traditional way. Is this for him to live in?
Yes, he wants to live in it.
As most first time buyers are finding it’s hard to find affordable properties in nice areas. He’s seen a few locally but they have been up for auction.
They look like ex rentals or elderly people have lived in them.
The competition is high, about 1/3 of all purchases are cash, not mortgages . One of my daughters is having the same problem .Bank of Dad is the only solution.
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You can make an offer before or after the auction which the seller may be happy to accept, rather than participate in the auction. Remember a property will need a functioning kitchen to be mortgageable. Alternatively approach local agents & tell them what you are looking for & can they let you know if anything comes up. Lots of LLs wanting to sell. Be a little wary about a house where someone has died - probate can take a long time so the purchase may not be quick.
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re probate . Depends how far along in the system of probate it is into .I bought a commercial unit where probate was granted , put in a pre auction offer , accepted , within a month was mine. The bungalow I now live in was delayed in probate I waited a year and then got it 2 hours before the stamp duty holiday ended… So all depends on where in the probate process they advertise it.
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Dont do it , you can easily lose your deposit.
If you have a solid house that you can remortgage to raise funds against then maybe but you would have to spend money, surveys etc to get that ready in 28 days.
desirable auction props usually go at least 10% over guide sometimes a lot more.
also you can get hidden issues,
I have bought a few times at auction and I have had cash to buy but its not for the faint hearted and you need to have an extra wedge of cash when you find the additional issues that come up doing the place up.
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Buying at auction is for the cash players you would have to secure the loan funds before auction because the auction rules would not allow you time to do after and man would lose his doe deposit auctions are not for the messers I know plenty man bought and wish they never had because of unseen problems hidden they had no survey
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If you are in the building trade you know what to look for. However there is always something you can miss, and usually you need extra cash to remedy it
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Yes, he’s decided against it.
I bought our rental at auction but it was afterwards as it hadn’t sold. I was able to complete in 2 days as I had the cash ready.
Didn’t realise it could take so long for things to go through. Our mortgage for our home was 30 years ago, the days where they were throwing them at you with minimal checks.
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