Understanding The Intricacies of Auction Bridging Loans

January 24, 2022January 24, 2022 christina bridging loan, bridging loan calculator

If you find yourself needing money on short notice, bridging loans are an excellent option. Auction bridging loans enable individuals to acquire short-term finance for individuals possessing an asset required as security.

Confusing an Auction Bridging Loan with Property Development Loan is a common mistake due to the superficial similarities between the two. Property Development Loans are designed to help developers expedite their construction process, whereas Auction Bridging Loans enable people to acquire a property quickly.

The Auction Bridging Loan Process

Let us dissect the auction bridging loan process that can help us understand the ins and outs of this efficient financial solution.

The Seller

Firstly, taking an auction bridging loan indicates someone is selling something you wish to buy. The commodity in question could be a car, bike, boat, or caravan; irrespective of your desired item, auction bridging loans help you acquire it swiftly.

The act of auctioning a house indicates that the seller is under immense pressure to get rid of the property as soon as possible, giving you a good chance of getting a cheaper deal, especially if you follow the auction finance route.

A common occurrence during an auction is getting a cheaper deal enabling you to buy a vehicle with a market price of $10,000 for $8,000.

The Application Process

When considering applying for a bridging loan, a financial broker expedites the application process. As a result, they can help lower the interest rate for loans, especially if you want to finance a house that needs refurbishment or repairs. It ensures transparency between the bank’s finance and where it is invested.

It helps the bank understand that you ultimately spend the money to repair the property to increase its market value. If you need cash in the short term, a financial broker can get you the money as quickly as within 24 hours.

The Title Deed

Once you have bought the commodity of choice at an auction, the next step is to ensure that the title deed has been transferred over to you. If the seller fails to do so, it could lead to complications down the line when you try to sell it again.

A finance specialist is well versed in diverse market scenarios delivering innovative solutions irrespective of your experience as a developer. They are equipped with the skills required to provide personalized solutions as per the individual solutions.

Key Features of Auction Bridging Loans:

You can have an agreement with your bridging loan lender to expedite the buying process once your bid has won at the auction. Pre Agreed auction finance helps move things quickly.
A bridging loan doesn’t always require an income or credit history. Unlike a mortgage, bridging loans don’t need employment history or business plans; they are dependent on the exit strategy instead, making them quicker.
A bridging loan can be acquired for 12-18 months.
You can borrow a 70-75% loan which can be increased if you use another property as collateral at a lower interest rate. A bridging loan calculator can provide an idea of how much you can borrow based on the valuation of the property helping you form a robust repayment plan.
If you’re buying a property at an auction, you will be required to pay a 10% deposit on the same day and sign a legally binding contract to pay the 90% within 28 days. A bridging auction loan can help you with the lack of funds allowing you more time to finalize the sale of your existing property. Bridging loans are available for land, commercial property, residential property, and buy to let buildings.

Things to Ensure Before Bidding For a Property At Auction:

Auction bridging loan is made available to you promptly, which means it is pivotal to have a robust strategy in place and ensure no outstanding issues on the construction site.
Review the auction catalog for any preexisting flaws or conditions.
Properties being auctioned usually require refurbishing, which is why it is essential to view the property along with a builder, architect, and surveyor to assess the work and costs involved.
Ensure the property you choose to invest in is a profitable investment.
Obtain a legal pack from auctioneers consisting of title deeds, local authority searches, and relevant information about the property.

Conclusion

Now that you have gained familiarity in obtaining auction bridging loans and how they help investors acquire their desired properties. Auction bridging loans enable investors to buy properties on short notice offering them cash flow solutions.

The last stop on your explorative journey of financial assistance for developers and investors is locating a competent bridging loan provider that caters to your specific needs. It is pivotal to choose a funds provider that quickly offers all types of bridging loans at the best market rate.

UK Property Finance is a leading provider of financial services ranging from bridging loans, mortgage finance to secured lending and development finance. Their interest rate is as low as 0.43% and can increase by 1.5% on your direct loan amount.

UK Property Finance is FCA authorized and regulated, making it your prime trusted financial partner. Contact us today to unfurl the magic of financial assistance with zero upfront fees and leading market rates.