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Are You Looking for Finance for Buying a Property at Auction?

If you’re buying a property at auction, you’ll know that you need to act fast to secure funding. Swift Property Finance is an experienced auction finance company, used to working with customers buying commercial and residential property who are looking for competitive auction finance rates and need a quick decision on their funding application.

Auction Property Finance from Swift
Auction Property Finance

What can auction property finance be used for?

Simply put any property you buy at auction. Whether you’re buying a residential property, a semi-residential property or a commercial property such as an office or factory space, if you buy a property at an auction, then auction finance is for you. We have access to a variety of auction finance lenders so whatever the project we’ll be able to find the best property auction finance for you.

Finance for auction properties

Why would I buy a property at auction?

Auctions can be a great way to secure a below-market-value property. Auctions are also a good place to find more unusual properties that estate agents are uncertain how to sell. In addition, once the hammer falls the sale is agreed, so if you won the lot, you know the property is yours. As long as you can secure the funding of course!

Why Specialist Auction Finance?

When you buy a property via an auction house you generally have to pay the balance on your purchase relatively quickly. Normally purchasers pay a deposit on the day, and then have 28 days to completion. Unless you have a mortgage already in place before you go to the auction this does not give you the time to buy a traditional mortgage property. At Swift Property Finance we can help you secure bridging finance to complete your sale.

Bridging finance has another advantage when it comes to funding a property auction purchase. Many of the properties that are being sold at auction are not suitable for mortgage lending anyway, because for example they are in need of extensive renovation. However, bridging loans do not require properties to be in a particular state of repair making them often the most viable option for financing an auction property.

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About Auction Bridging Finance Auction Finance FAQs

Can I get a loan to buy property at auction?

Yes, many people use a bridging loan to fund auction purchases, as they can be completed quickly within the 28 days required by most auction houses.

Can I go to an auction knowing I have funding in place?

If you have a property in mind that you are interested in, we can arrange to get an agreement in principle in place before the auction, so you can bid knowing that you should be able to secure the funding within a reasonable time frame. Following a winning bid, the full underwriting process can then begin, and a bridging loan can be advanced in anything from 2 days up to about 2 weeks.

How much can I borrow?

Loan amounts are calculated on the full market value of the property you have bought. At Swift Property Finance we handle loan amounts of between £100,000 and £5,000,000

How much are the interest rates?

Again interest rates vary. The perception is that bridging loans have high interest rates in comparison to other financial products such as traditional mortgages. However slight differences in the rates have to be balanced against the much shorter terms of bridging loans, typically no more than 24 months compared to the 25 years of a traditional mortgage. Interest rates range between 0.7% and 1.3% per month.

Isn’t bridging finance quite expensive?

It is more expensive than a mortgage, with rates going from 0.6% per month up to 1.0% per month, however it is a short-term product, and so it really can’t be compared to a mortgage. In terms of short-term loans, bridging finance is actually very cheap.

How long can I borrow the money for?

As already mentioned, bridging finance are relatively short terms. They are generally no more than 2 years, and can be as little as a few months.

How much of my own money will I need to commit?

Typically, most lenders will go up to a maximum loan to value of 75% when fees and interest are included. This means that you would normally need to have a deposit of at least 25%, but probably more like 30% of the purchase price to account for fees and interest. There are occasionally cases where 100% funding can be achieved, but these situations are extremely rare and either require additional security from another property, or a purchase price significantly below the market value.

What will the loan cost me per month?

Generally, there is no monthly payment required, since all the interest and fees are “rolled up” into the loan and the loan, fees and interest are only repaid on exit.

What other fees and costs are there in the loan?

As well as the interest, for which the rate is variable, the lender will charge a 2% arrangement fee from the gross loan amount, and then there are several fixed costs including legal fees, valuation fees and sometimes a broker fee. Fixed costs do vary, but in total can be anything from £2,000 and upwards.

How do I repay the loan?

When the loan is put in place, you will specify your “exit strategy”. This can be the sale of the property following a refurbish, or it could be refinancing into a traditional mortgage product, such as a buy-to-let. In the case of exit by refinance, the bridging loan just allows you the time to complete with the auction house within 28 days, where you wouldn’t normally be able to get a mortgage in time.

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Why Swift Property Finance Trustworthy, Bespoke, Independent, Quick

Swift are FCA regulated for your peace of mind

Personal Service

Buying a property at auction can be exhilarating but getting the finance in place in time can be stressful. That’s why we offer all our customers a bespoke service. By working with you on a one-to-one basis we can make the experience as smooth as possible.

Quick Decision

Swift Property Finance will only recommend products that will ensure that you have your funding in place well before the 28 day limit often imposed by auction houses. We’ll strive to get a quick decision so that you can finalise your purchase and get on with your property project.

Swift give you quick results
Swift give independent and impartial advice

FCA Approved

Swift Property Finance is authorised and regulated by the Financial Conduct Authority. That’s your guarantee that we’re fit and proper people to handle your auction finance application.

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Swift Property Finance, Mullion House - Unit U1, Aberuthven PH3 1EL