Raising capital to buy properties at auction
Auction Finance
Discover the innovative auction finance calculator, a dynamic resource designed to revolutionise your approach to auction purchases. Uncover the intricacies of utilising specialised financial solutions for your property investment aspirations with our state-of-the-art tool.
Being able to get funding on short notice when you want to buy property at an auction is important; otherwise, you may miss out on purchasing the property you want. Unfortunately, traditional funding typically takes a long period of time, making it difficult for people to secure the type of funding that they need to buy property at auction.
Auction finance is a short-term financial product
The best way to make sure that you have the funds you need when buying property at an auction is to rely on auction finance.
Also known as bridging or short-term finance, auction finance makes it possible for borrowers to get the money that they need to purchase property in a short period of time. Almost any type of property can be purchased using auction finance, even if the property is not currently habitable. This is another feature that sets this type of lending apart from others that are currently available, as most require the property to be habitable. Both residential and commercial property can be purchased using auction finance, and they make it easy for landlords to buy property as well.
Both business owners and investors can use auction finance to purchase commercial property. This may include warehouses, leisure centres, pubs, offices, and shops. When wanting to buy commercial property, it is often important to move quickly so that the borrower is able to beat any other people who are interested in purchasing the property, and auction finance is generally the fastest way to get the necessary funding.
Let our loan search tool compare rates for auction finance against high-street banks and other institutions:
How an auction finance calculator works
Curious about how it operates? The Auction finance calculator, also known as the auction Funding repayment tool, is an engaging platform that empowers you to assess the comprehensive expenses associated with securing financial support for your auction ventures.
Simply input essential information related to your investment, such as property valuation, desired loan amount, and loan duration. Witness the magic unfold in real-time as the tool generates detailed results, including the gross and net loan amounts, the loan-to-value (LTV) ratio, and the breakdown of monthly interest payments. Embrace a new era of financial clarity and support for your property investment endeavours!
Properties for which an auction loan calculator can be used for
Unlock the versatility of Auction Financing by exploring its applicability across a diverse range of properties. From residential havens like houses and flats to the expansive realm of commercial and semi-commercial spaces encompassing stores and offices—our auction loan calculator stands ready to cater to your distinct property needs.
Lending criteria
Borrowers from a variety of backgrounds can access our auction funding. All of our products are available to anyone aged 21 to 85 who are investing in property in England or Wales.
Individual borrowers, self-employed individuals, various company structures, and even foreign nationals or offshore organisations can use our loans. We welcome applications from any countries except than those that have been sanctioned.
We use a flexible lending criterion procedure, with each application evaluated on its own merits and circumstances. We don’t have a check-box lending policy, and we accept applications from those who have CCJs, defaults, or even bankruptcies on their records.
Auction finance removes the need for a costly traditional mortgage
By using auction finance to purchase property at an auction and then refinancing the purchase at a later time, borrowers are often able to get a great deal on a piece of property without having to worry about how they are going to arrange a traditional mortgage. Refinancing the property later makes it possible for the borrower to get a great rate.
There are some conditions for purchasing property using auction finance and also for refinancing the property later, but since each lender has his or her own set of rules and regulations, it is wise for the borrower to talk to the particular lender about any restrictions that are in place. While some lenders require landlords to own their property for more than six months before refinancing the loan, others do not require this.
Using auction finance is a great way to buy property quickly and often at below-market value. Being able to purchase property when it is at the right price can make a huge difference in a person’s success or failure as a landlord, and, for this reason, working with a company that provides auction finance is important.
Advantages of bridging finance for auction property
There are a number of reasons why people use auction bridging loans to buy property at auction. Not only will you already have a set amount that you can bid, but you can close and bridge very quickly so that you can begin work on the property. You will already be prepared for how much the project will cost, and you will understand the amount of interest that you will have to pay back so that there are no surprises.
It’s important that you are aware of the risks as well as the advantages when considering a bridging loan for auction properties, so that you are not taking on too much risk that you are unable to handle. At donkey.finance, we are happy to talk to you about the pros and cons of auction bridging loans. This will ensure that you are aware of all of the stipulations of this type of loan, know how to pay it off, and don’t accidentally borrow more money than you actually need. Using an auction property bridging loan is the best way to buy property at auction, and when you work with an expert and reputable lender, you do not have to worry about taking as many risks.
Speed of funds
The proceeds of the auction might be with you in as little as three days. However, the delivery time will be determined by your circumstances and the kind of your investment. Some cases may take many weeks to complete.
In most circumstances, auctions must be completed within 28 days. We will work as swiftly as possible to deliver money in time for an auction house’s strict deadline.
Borrowing amount for property auctions
Dive into a world of diverse financial possibilities with our auction funding options, offering a broad spectrum ranging from £100,000 to £20,000,000. Maximise your potential with a generous loan-to-value (LTV) cap of 75%, providing you the flexibility to tailor your financing to suit your unique needs. Choose your financial journey with terms spanning from a nimble 3 months to a comprehensive 24 months, ensuring that your investment timeline aligns seamlessly with your aspirations.
Calculation of interest payable
Our auction bridge loans, like all of our products, have interest rates depending on risk. They are influenced by your personal circumstances, your investment, market risk, the Bank of England’s base rate choices, and other factors.
The short-term nature of the funding will have an influence on interest rates in the specialty finance sector in particular. As a result, your auction financing interest rate will be highly influenced by your exit plan and duration.
How Donkey Finance can help
We have several years of professional financial experience and have gained extensive understanding of the auction industry over that period. We understand how fast they move, the sorts of properties that appear in auction houses, and the pressures that buyers experience.
When we evaluate your case, we will take all of this in mind. We value speed, flexibility, and dedication across all of our offerings. You may bid with confidence knowing that we are available to assist your long-term investment ambitions.
Try our free auction finance calculator today to obtain a quick quotation.
How to get finance to buy at auction?
If you’re planning to buy a property at auction, it pays to be prepared. In most instances, you’ll be expected to pay a deposit of 10% on the day, followed by the remaining balance within a couple of weeks. As a result, conventional mortgages and general home loans are out of the question.
There are various avenues to cover the costs of a property at auction. If you currently own one or more properties, you could consider organising a secured loan ahead of time. Specialist auction finance and bridging loan services are also available, which can be particularly useful for auction property purchases. If you’re able to come up with the cash to pay for the property outright, this is the fastest and most cost-effective approach of all.
The important thing to remember is that from the moment your bid is accepted, you’ll have very little time to come up with the cash you need. Planning ahead is therefore vital, though there are options to explore if you need a substantial amount of cash as quickly as possible.
How to finance auction property?
As mentioned above, specialist auction finance is ideal for covering the costs of properties purchased at auction. Unlike a traditional mortgage or homeowner loan, auction finance is a kind of fast-access bridging loan for this specific application.
Typically, auction finance can be used to cover 75% to 90% of the property’s value. Secured against the borrower’s existing property or assets, no credit checks or proof of financial status are required. Just as long as you’re able to cover the cost of the loan with acceptable collateral, you’re almost guaranteed to qualify.
These made-for-purpose auction property purchase loans can also be offered at surprisingly low rates of interest and with minimal borrowing costs. Best of all, from application submission to receipt of the funds required, it can take as little as five working days. Flexible repayment terms are available to suit all requirements and budgets, but you’ll need to look beyond the High Street to access the best auction finance deals.
