Auction Finance

Proper Finance works with a number of specialist auction finance lenders, allowing you to receive up to 90% of the property value and secure funds within 24 to 72 hours. Start by entering your details including the property value and how much you need to borrow and our partners will come back to you with a personalised quote.

How Does Auction Finance Work?

When it comes to this kind of funding, auction finance specifically refers to being able to take out a loan or borrow money in order to help finance a property that you have bought at auction. The purchasing of property at auction has been growing in popularity in recent years, and there are a number of reasons why. For example, an investor could very well be able to get a discount of up to 30% off the original valuation of the property, if the agents selling it are intending to make a quick sale.

However, one important thing to keep in mind is that you will be required to pay off the full value of the purchased building within 28 days, or you could lose it entirely. Proper Finance understands the importance of getting auction finance quickly and efficiently, with our team working with a variety of leading lenders in the auction finance sector, helping you to find the right type of funding you need.

What are the benefits of buying a house at auction?

Potential discount: as briefly mentioned earlier in this article, the biggest advantages for most people purchasing a property under the gavel is the potential for huge discounts. If you manage to nab a property on the market at the right time, you could end up being able to receive a whopping 30% discount on its market value. This could be because the house has previously failed to sell at auction, or the property needs a considerable amount of renovation work, or even because the house is probate and the family members are looking to sell it to raise cash.

Less complicated process: in addition, the process tends to be far less complicated than say, getting a mortgage. Applying for a mortgage involves lots of paperwork, a number of meetings and perhaps weeks of waiting in order to get a decision in principle as well as approval. When buying a property at auction however, all you need to do is provide a 10% deposit on the day, with the rest of the balance needing to be paid off with 28 days.

No gazumping: when purchasing a home at auction, you are legally obliged to go ahead with the sale. That provides you with peace of mind, as you do not need to worry about potentially being gazumped by another buyer. Not having to fret about the deal falling through or taken by another buyer is a huge positive when it comes to purchasing at auction.

Moving in quickly: if you are intending to buy at auction with the purpose of the property being for you and your family, then great news! a great advantage for you is that you will be able to move in quickly if your bid at auction is successful. You have to complete the sale with 28 days, and you can get going with moving in, without having to wait a long period of time to move in as you typically would have to with a mortgage.

What Are The Terms of Auction Finance?

When making an application through Proper Finance, we will usually need further details about the property you have just bought. An appointed surveyor will come to make a valuation on the house, as well as discuss with you what your future plans are for it, as these can impact on the terms of the loan.

All the lenders we work with our FCA authorised, therefore expect there to be various credit checks carried out in order to ensure that auction finance is affordable to you in terms of repayments. These checks will look at your repayment history for other loan products you have had, credit score, as well as your income.

Regarding the maximum loan-to-value (LTV) for regulated lenders, this will be up to 70% in total. That means that if you are looking to raise £500,000, the maximum you can get a loan for is £350,000 after your initial 10% deposit. This is something you should bear in mind prior to applying for bridging finance.

How To Apply For Auction Finance With Proper Finance

Proper Finance works with a variety of bridging lenders across the country, as we understand not just one lender will meet all our customer’s requirements. Considering borrowers on an individual basis is important to us, as we want to make sure we find the right bridging finance product for you.

Providing that you meet the criteria and complete the tasks needed by our lenders and Proper Finance, then it can be possible for you to receive the funds you need all in less than 14 days.

If you would like to apply for auction finance with Proper Finance, all we need you to do is click apply now on our site, fill our online application form taking just under 10 minutes to complete, and we can help you start getting the ball rolling today!