Auction finance is a form of fast, flexible and reliable finance allowing investors to capitalise on attractive auction opportunities quickly. This is often key to the success of investors and developers because buying property at auction requires speed and reliability. Like traditional bridging loans, auction finance is offered on a short-term, interest-only basis.
Many investors and developers worry about having cost effective funds in time for the completion of the auction purchase. Merryoaks is able to provide lending decisions within hours of an initial enquiry with funds provided in a matter of days.
Key Features
Short-term finance over 1-12 months
Funding for unmortgageable or uninhabitable properties
Funding for non-standard construction
Monthly interest rates from 0.4%
Funding for residential, commercial and mixed-use properties
All types of income considered
Adverse credit considered
Up to 80% loan-to-value
Your new,personal team.
Getting the best of property financing has never been simpler.
It is possible to receive the funds within a few days of application, provided you have enough deposit (or another property/asset as security) and have demonstrated a clear exit strategy. This is usually a remortgage or the sale of the asset.
Before attending the auction, speak to your finance advisor about the property you are interested in purchasing. Ideally, that finance advisor is an active investor themselves as they will analyse the likelihood of you securing the finance you require along with the merits of the deal. The likelihood of raising finance will depend on many factors including (but not exclusive to):
- The location of the property - The type of property - The exit strategy of the deal - Your previous property experience - How much you want to borrow
Based on the above, your finance advisor will arrange the best Offer in Principle ready for you to participate in the auction. When purchasing at auction, you will be required to pay a 10% deposit on the day and the balance within typically 28 days.
The lender may carry out a formal valuation of the property and this will lead to a formal offer for your finance.
Who is eligible for Auction Finance?
Auction finance is typically available to all types of borrowers, including employed, self-employed, limited companies, limited liability partnerships, sole traders, partnerships and those with adverse credit history. Because the finance is repaid via the exit strategy, the borrowers income is not considered.
What deposit is required for Auction Finance?
Auction finance requires a deposit of 10% - 35% of the loan. However, some lenders will accept another property or asset of equivalent value to serve as security. Higher deposits can provide more favourable rates.
Why Merryoaks?
The Merryoaks Property Finance team have a long and successful background in finding and providing creative financial solutions for property investors and developers throughout the UK. Our aim is to help you fund your next investment or development project and be part of your on-going growth to bigger and better deals.
