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Can I use a mortgage for an auction purchase?

People believe you can only buy at auction if you have full cash funds available. It’s great to do it that way if you can, but many people can’t, and that is where we come in. You can still grab a bargain using standard or specialist mortgages, as well as bridging finance and commercial loans.

Property auctioneers usually publish their catalogue in hard copy and online around a month prior to the auction date. If you see a property that interests you, Mortgagemove can help you in preparation for your bidding.

Block viewings will be arranged for specific dates and, as well as being your only opportunity to view the property, they are your best chance to get a building survey or valuation undertaken. You don’t want to buy something and get a nasty surprise afterwards – and sales are not subject to survey – so it can also be prudent to involve a builder or architect at this stage too. This will give you a better idea of how much you should pay for the property.

On the day, you can bid in person, by proxy, or over the phone. It’s vitally important to set your budget and try to stick to it. 

How does an auction-financed purchase work?

If you are successful in your bid, you will have to pay a 10% deposit immediately. The balance is generally due within 28 days. That being the case, time is of the essence; many people choose to have a valuation done in advance, or immediately after successfully securing the property depending if they’re using traditional mortgage, bridging finance, or a commercial loan. 

Either way, you should certainly secure some form of agreement in principle (AIP) prior to the auction, but it’s important to note this is not a guarantee of a mortgage.

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