Auction Finance Case Study

This month we thought we would share a case study with you to highlight the great work Chartwell Funding does with our auction house partners. This is one of many very happy clients that we have helped to buy properties at auction in what can be a fraught and tense time.

Mrs C had spoken to an IFA to get an agreement in principle for a mortgage as she had seen a property in the auction catalogue. She went along to the auction and successfully bid for the property. As ever, Chartwell Funding had an adviser at the auction and Mrs C asked them for a second opinion now that she knew the purchase price.

Our advisor looked at the documentation provided by the IFA and it transpired that it was not an agreement in principle, merely a print out of a lenders online affordability calculator showing that the loan required could be achieved. Our advisor took the basic details from the client and confirmed the mortgage would be possible. They emailed her a mortgage fact find to complete overnight and asked her to attach all the supporting documentation a mortgage lender would require (payslips, bank statements etc), so as a formal recommendation could be made.

First thing on the day after the auction, the CF advisor completed a full market review and emailed a recommendation to the client. This was accepted and by mid-morning the application had been submitted, agreed in principle, the basic mortgage valuation instructed, and the supporting documents uploaded to the lenders processing system.

Three days later the valuation was carried out and this was received by the lender two days later. On the seventh working day the formal mortgage offer was issued to the solicitors, leaving them three weeks to complete the legalities for the transaction and meet the completion deadline agreed at the auction.

Mrs C was lucky as she had a deposit, a steady income and the property was habitable. Typically auction purchases are a lot more complicated than this and traditional mortgages cannot be used and alternative products such as bridging finance need to be considered. Therefore, it is highly recommended that you speak to us before going to an auction to ensure you know that you can afford the property you are bidding for, the cost of the finance that is available to you and that the finance can be arranged quickly enough to meet any completion deadlines.

If you would like to speak to one of specialist mortgage advisors please don't hesitate to call us on 01454 540 500.