Bridging loans can make online property auction purchases easier
An August 2017 PropertyInvestorToday.co.uk article notes that the number of online property auctions is growing, and bridging lenders are providing finance for winning bidders.
Many property investors buy property at auctions. Traditionally, property auctions are held in a room full of bidders with a few buyers bidding by telephone. There are an increasing number of online only auctions.
Online auctions make the buying and selling of homes simple. Auction houses will provide a free appraisal for property sellers which will help decide the guide price. The seller then picks a date and time for final bids. The process works like an eBay auction where buyers place online bids, with the highest bid winning when the auction ends. Bidders will also have an opportunity to visit the property during block viewing times.
After a winning bid, a deposit is paid, then the completion of the purchase needs to be made within 28 days. This may not be enough time to arrange a mortgage for the property, so a short term bridging loan can be used to raise the money to complete the sale, then repaid once mortgage funds are available. Buyers will need to use a solicitor who is familiar with conveyancing for auction properties who can complete the legal process quickly.
Some auction houses have made arrangements with bridging finance providers to approve bridging loans in principle for homes being auctioned. Buyers can also use a finance broker, who can arrange both bridging loans and more long-term mortgages for properties.