Auction Bridging Loans

Very! The appeal of auction bridging loans, and bridging loans in general, is that they are much quicker to arrange than standard mortgages, meaning you can respond quickly and get cash in the bank in a very short timescale.

Most auction finance lenders say they can get a loan secured for you and funds released with two weeks, although depending on the complexity of your circumstances and your deadlines, it can often be done even more quickly than this, sometimes within days. Many lenders also offer fast track application processes, so this could be appropriate for you buying at auction where you need a really quick bridging loan.

Yes, when buying at auction you’ll need to hand over a 10% cash deposit as soon as you agree the sale, so you’ll need to be prepared with this on the day of the auction. You may need a further deposit to secure your auction finance and many lenders will impose LTV limits. However, if you have other assets that you can secure against the loan in lieu of a deposit you may be able to get a loan for up to 100% of the property value.

Yes, but you will need to have at least the 10% deposit to pay on the day and be confident that you’re in a strong position to get finance in place as when the hammer falls you are entering into a legally binding contract. With most auctions you will have 28 days to pay the remainder of the money, so this should be time to get auction finance in place as long as there are no problems along the way, but do double check this as sometimes this payment window can vary in length.

Yes, as part of your auction finance application assessment your lender will carry out checks into your credit history. This is one way for lenders to make a judgement on how high risk you are as a borrower - bad credit issues in the past will be a red flag and may lead to your application being declined.

You can still get auction finance with bad credit, but you may need to find a more specialist lender and be prepared to pay a higher rate of interest.