IN THE SPOTLIGHT: auction finance
Driven by attractive prices and the speed at which a deal can be completed, property auctions are appealing to a wider audience, including buy-to-let investors, who are increasingly visiting auction rooms in a bid to find a good deal.
Property investors can benefit from buying a property at auction below market prices, typically within a 28-day time frame. They can also benefit from contributing smaller deposits of around 10%.
However, an investor wanting to take advantage of these opportunities can often face barriers when it comes to raising funds. Either they are unable to get a mortgage because the property requires major work, or it is virtually impossible to secure a mortgage in the tight 28-day time frame.
These circumstances have caused auction buyers to rethink their financial arrangements and seek alternative methods of funding, with auction finance offering a real-time solution to the funding gap. mtf has seen a notable increase in applications from investors and developers wanting to buy properties at auction.
One of the main benefits of an auction finance loan is the speed at which funds can be delivered. Where a mainstream bank may take several months to put together a loan for a borrower, an auction finance company is often able to make lending decisions within hours of the initial enquiry, so funds could be released in less than a week.
mtf completed a case for a client who needed £215,000 to complete an auction purchase and make renovations to the property. Their mortgage lender couldn’t provide the financing in the time-frame required and so they faced losing the deposit.
mtf provided a £215,000 loan, at 65% loan-to-value, over a six-month term, with no exit fee or early redemption penalty. We managed to provide the loan within 24 hours, saving the client’s deposit. They then had the time to renovate the property and increase its value before refinancing out of the loan with a buy-to-let mortgage.
Some auction finance providers can work with clients to ensure they go into an auction fully prepared and at a competitive advantage. Our clients look at catalogues to identify target properties, setting themselves a maximum threshold they want to pay. We can review their loan options at an early stage, prior to auction, and provide them with indicative terms. This way they can go and bid with confidence, knowing they have adequate finances in place so that a transaction can complete with minimum fuss.
- Up to 70% LTV on open market value
- Loans from £100,000- £5,000,000
- Terms from 3-24 months
- Commercial/ semi-commercial/ residential assets
- No exit fees
- No ERCs
- Whole of England coverage
why use mtf?
mtf is here to work with you to get your auction finance loan completed in a matter of days. As a non-status lender, we can take a view on CCJs, defaults and arrears, and we do not always require evidence of credit history, accounts or proof of income- instead we focus on the property and your future plans.
- No personal guarantees required
- No credit scoring
- Lend to foreign nationals and offshore companies
- Underwritten offers issued within the hour
- Average completions within 9 days
Don’t miss out on an investment opportunity, call mtf on 0203 051 2331 or apply online to see how we could help turn your aspirations into achievements.