Have you ever attended an auction or at least heard of one? Buying a property at an auction is a great way to get the most out of your investment.
While many people think purchasing an asset through auction is a little daunting, it’s still one of the most hyped options out there.
What is auction finance?
In simpler words, auction finance is a type of bridging loan that is typically used to purchase property at auction. It’s also known as auction bridging finance and serves as an incredible alternative to traditional bank loans.
If you have a good credit history and stable income, getting auction finance from some lenders shouldn’t sound like a big deal.
Auction finance is a way for you to borrow money from lenders who want their return on investment (ROI). This has to be paid back as a lump sum payment within 12 months.
Why use auction finance?
As said before, Auction finance is a quick and easy way to get the money you need. However, there are many other reasons you should consider this option for:
- ● It's best when you have to borrow small amounts of money quickly but don't have enough cash on hand or in your account at the time of the auction.
- ● Auction Finance helps when you have to get a loan without making a deposit first. This means no one knows how much they owe until after they've won their item at auction.
- ● Quick approval process. The right lenders are experts at processing applications quickly, so all you need to do is wait for your approval email.
- ● Flexible terms & conditions that suit your needs best. With auction loans, you get flexible terms ranging from 30 days up to 180 days, depending upon what fits into each person's budget best
Are there any fees associated with the loan?
Yes, property investments made during the auction come with a fee for the loan. This is usually charged as a percentage of the loan, and it could include application fees, processing fees, discount fees, legal fees, and mortgage fees.
How does auction finance work?
Auction finance is a type of secure loan that allows you to buy property at auction.
As a result, you can get the money in advance of the auction closing, which means you don’t have to wait until the day before or after the auction date.
Auction finance basics
Auction finance is a type of lending that allows you to get the money you need for purchasing properties at auctions at a lower price. While it’s similar to other forms of financing like payday loans, there are significant differences in how they work and what they cover.
Do I need a deposit to secure an auction bridge loan?
The deposit is a fee that you pay upfront to secure an auction bridge loan. This fee is usually equal to the interest on your loan for a month, but it varies depending on how much you borrow and what type of auction bridge you choose.
However, the deposit can be refunded after the auction if no other buyer purchases your item at its lowest price point with an acceptable bid amount.
Are there any other costs involved in an auction bridge loan?
There are no other costs involved in an auction bridge loan.
- ● You won't need to pay any fees upfront, and you can spread out the cost over several years.
- ● If you have a good credit history and have been paying your mortgage payments on time, chances are you may get an auction finance loan at a lower interest rate.
- ● When comparing rates between different types of loans, choose one that suits your needs and budget.
Conclusion:
Purchasing a property at an auction can be overwhelming, but it doesn’t have to be frightening at any cost.
If you’re planning on buying a house at an auction, auction financing is an ideal option for you. It’s fast and flexible and allows you to complete your purchase quickly at the lowest possible cost.
The best part is that auction financiers can lend up to 100% of the value of the property, which means that they provide financing in exchange for a 10% down payment (or less). This type of financing usually takes 24 hours from submission to getting approved.
If you aren’t sure whether this type of loan might work for you, we recommend speaking with one of our specialists about the best options available for types of mortgages.