Financing Auction Property with a Bridging Finance Loan

The popularity of property shows such as ‘Homes Under the Hammer’ have inspired a generation of people to look at auctions as a means to finding their next property investment. In today’s economic climate, as many potential homeowners struggle to secure a deposit or mortgage, it is an ideal time to find a property bargain. One of the best ways of doing this is in a property auction. Property auctions rely on you making quick decisions and securing the best deal, and a bridging finance loan from specialist bridging loan providers such as Ascot  is one of the quickest ways of financing an auction property purchase.

A bridging finance loan is designed for a shorter period than a mortgage, often for any period ranging from a few weeks to a few years. It is designed to give you cash quickly, especially important if you have seen a property bargain in an auction. It provides the capital in the short term so that you can then arrange a mortgage to finance the borrowing over a longer term. This is perfect for those looking to grab a bargain in an auction, as properties are often snapped up by serious investors and property developers, especially with the buoyant rental market. In addition, when you buy a property from an auction, you often only have 14-28 days to complete the sale and pay for it, meaning that longer-term borrowing solutions are often more difficult to arrange quickly. Bridging finance loans are often repaid once the property is sold, or if a mortgage is taken out, meaning that there is no pressure to repay immediately as there might have been with a bank loan or credit card.  They can also be used if you currently own your own property, and have a mortgage, but are looking to add a buy to let investment to your property portfolio.

Bridging finance loans are especially useful when, for instance, you know that you will be hoping to purchase an auction property and that you will have a mortgage arranged a few weeks later. They should, generally, not be considered as a long-term borrowing solution because they can work out more expensive. Here at Ascot Mortgages, we can help you to find the best deal, one that does not have any early exit fees, so that you can pay the loan off in full when your mortgage is arranged. This type of loan has increased in popularity as the housing market has become increasingly depressed and means that there are often competitive deals to be had, which we at Ascot Mortgages can find for you.

There are two main types of bridging loan, the ‘closed bridge’ and ‘open bridge.’ The first option is generally for people who have already exchanged on their property, but the ‘open bridge’ is especially suitable to those who are looking to buy a second property, perhaps through an auction. Buying a property through an auction, either as a home or an investment, can be a brilliant thing to do; it can let you grab a bargain, free up money to make the property your own, or provide a source of extra income that may increase in value. Bridging loans can be the ideal solution to this, but because of the choice available.

For more information please contact www.ascotbridgingfinance.co.uk a part of the Ascot Mortgages Groups www.ascotmortgages.co.uk