My partner is going to an auction soon and wants to bid on a house. I'm concerned about him getting the money together soon enough, if he wins the bid. He's bidding up to £60K but you need to find the balance within 28 days. Is it possible to get a mortgage sorted within 4 weeks?

We looked into getting a loan, but he can't borrow enough. I'm also worried about not getting a big enough mortgage as the house may be valued at a lot less, it needs a lot doing to it.

Any advice would be greatly appreciated,

Thanks,

Den

Den --- You usually also need to pay a 10% deposit on the day of your winning bid, then have 28 days to come up with the balance, or you are open to a lawsuit for breach of contract, and would lose the deposit. So do not be tempted to bid and chance it, until you know you've got all the funds in place.

As for arranging finance the usual mortgage conditions appy, i.e. valuation and loan offer, it will have a valuation and the lenders should let you know how much they will lend based on this and your income etc, you then decide how much you are prepared to bid up to, bearing in mind the cost of renovating, it compared to the valuation.

 

 

Thanks, yeah, we have the 10% deposit, but as you say, if we haven't got the balance guaranteed we shouldn't bid. Just try telling my boyfriend that! We have the option of re-mortgaging one of our parents houses as a last resort. I don't think that takes as long as sorting out a mortgage.

why not arrange the mortgage beforehand? you can get an agreement in principle, the valuation done, and even an offer. you than have the 4 weeks for the solicitors to complete!

I would just make sure the deal you choose has no fees incase it goes pear-shaped though!

We can't really get a mortgage agreement beforehand, as we'd have to spend money getting a valuation done, unless I'm missing something?

Catch 22, You need a valuation to get a mortgage, but you need a mortgage agreed before you bid, I am afraid.

Otherwise it could be a gamble on being in breach of contract, if you leave it all until after you have won the property at auction, were they to refuse you a mortgage after you had bid for it.

I bid and won a property at auction like you are planning which needed renovating, but I was lucky in that my previous property had been sold and was sat in the bank.

You can get good bargains at auction as most of the prospective buyers are speculators or investors, if you are buying it for private use you can usually go above the prices they are willing to pay. I paid 25% less than it's rough true market value at the time, this saving allowed me to then renovate, which then pushed the value up by around 40%.

many companies now do free valuations, it's worth talking to a local broker to see what he can find for you

michael