Purchasing via auction is a great way for individuals and developers to secure a below-market-value property but it’s often believed that only cash buyers can take advantage of auction properties. This isn’t the case!
When equipped with a market-leading bridging loan from Velocity, you can open yourself up to a world of purchasing opportunities.
What is a bridging loan?
Bridging loans are commonly used by property investors and developers to purchase properties to renovate and sell.
Bridging loans are typically faster than conventional mortgage loans with an average completion timeframe of just under two months according to recent data.
However, with our exclusive 3-day bridging loan you can secure a bridging loan within just 3 working days so you can relieve an existing financial obligation faster.
Why is bridging used at auction?
When buying an auction property, you have a set number of weeks to complete the sale. The timeframe given can vary depending on the auction house but the usual completion date is within 28 days. This date marks the deadline for paying the auction purchase price in full and any buyer who misses this deadline could face serious financial consequences.
The speed at which you can secure a bridging loan is why they are often favoured over a traditional mortgage. You can learn about how we’ve helped property developers across the UK in our case studies.
Bridge loans can also be used for properties that are unmortgageable due to their condition. For example, if a property is uninhabitable because it lacks a functioning kitchen or bathroom, the property will not qualify for a mortgage. Using a bridging loan can cover the costs of the property or the renovations while the house is being brought back to a mortgageable state.
Is cash buying a thing of the past?
Cash only purchases are common within the auction community because this means cash buyers avoid additional charges associated with loans and credit. However, having enough cash to purchase a property outright is often unachievable for many people which is why many turn to bridging finance to secure a quick purchase.