AUCTION FINANCE

Auction finance is often favoured for its speed and flexibility. If you’re looking to secure a property quickly, traditional mortgage processes can be too slow. Auction finance caters to the fast-paced nature of auctions, allowing you to access funds typically within a tight timeframe.

Yes, it’s possible, but securing a mortgage for an auction property can be challenging due to time constraints. Auction purchases require completion within 28 days of the auction, which is often shorter than traditional mortgage application processes. Auction finance is specifically designed to meet these deadlines.

The amount you can borrow with auction finance varies depending on the lender, your financial circumstances, and the property in question. Typically, lenders may offer up to 70% to 75% of the property's value or purchase price, but this can go higher with additional security.

Eligibility depends on factors such as credit history, the type and condition of the property, the purchase price, and the bidder’s experience in property development or investment. Generally, if you can demonstrate a clear strategy for repayment, you might be eligible for auction finance.

Auction finance works similarly to bridging loans. Interested buyers get pre-approved for finance before the auction. Once the property is won, the auction finance quickly funds the purchase, pending a formal valuation and legal checks, and then the buyer either sells the property or refinances it with a traditional mortgage to repay the loan.

If finance cannot be obtained after winning a bid at auction, you risk losing the deposit and may face additional penalties as laid out in the auction’s terms and conditions. It’s advisable to arrange finances prior to participating in the auction.

In some cases, it’s possible to make an offer on the property before it goes to auction. If the offer is accepted by the seller and meets their reserve price, the transaction can proceed like a standard property purchase outside of the auction process.