Auction Mortgage
Anyone buying property at auction needs to be able to have finance available quickly.
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Normally on purchasing property at auction a 10 per cent deposit is required to be paid that day.
The buyer subsequently has a 28 day period to complete the purchase or risk losing the deposit and the property.
It is very helpful - and reduces stress - if pre-arranged funding is in place.
A popular mortgage product for buying property at auction is a chequebook drawdown mortgage facility on your own house.
The maximum mortgage is approved on your house. This provides a line of credit between the amount of your existing mortgage and your approved maximum amount.
With this facility in place, when you go to an auction you simply write a cheque from your drawdown facility for the 10 per cent deposit, and another cheque 28 days later to allow you to complete on time.
Once you own the property, you can then refinance using a buy to let mortgage, paying the purchase amount back into your drawdown facility so that it is ready to use again.
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