Property Buying: How Do People Afford to Pay Auction Prices?

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Welcome To The Mayfairbridging
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Property Buying How Do People Afford to Pay
Auction Prices?

• Auctions can prove a fantastic way to buy a
  house. This is because there are many so-called
  hidden gems at auction. These properties are
  either in good condition, or have great potential
  for refurbishment. Such properties sell at
  auction for a number of reasons. Sometimes its
  because the homeowner has died, and there is
  nobody available to make alternative
  arrangements, such as selling the property via an
  estate agent. Other times, they might be sold at
  auction because a mortgage company took
  repossession of the house after the original
  owner defaulted, and the bank now wants a quick
  sale.
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• However, auctions are also complicated
  because you are expected to have at least 10
  deposit to pay on the day, with the rest falling
  due within 28 days. That means that you have to
  be able to get your hands on a lot of capital
  very quickly. For many people, auction finance
  can be relatively difficult to obtain. However,
  there are a few options available. Lets have a
  look at the options that you have with regards
  buying at auction

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• Mortgage
• The most obvious type of auction finance is the
  mortgage. Mortgages are generally large loans
  offered by the high street banks and other
  lenders. The mortgage is secured against the
  purchase of the house and this leads to
  reluctance with banks to finance auction
  purchases. This is because the state of the house
  is often unknown, or unknowable to the bank,
  before the purchase goes through.
• Generally, a bank will want to run a full
  assessment of the house, including a building
  survey, to make sure that the investment is
  sound. If they cant get to the house to carry
  out this survey, theyre less likely to lend.
  Often, you can secure the montage against another
  property, but only if this other property has
  enough capital, and is not itself secured against
  a mortgage.

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• Capital
• The most hassle free way to buy a property at
  auction is to use capital. There are several
  different sources for capital. These include
• Private most people dont have 200K hanging
  around to pay for a house, but some do. If you
  have the capital, then it can make sense to buy
  the property out right.
• Commercial sometimes you can get sponsors to buy
  the house on your behalf. They buy it on the
  understanding that you will turn a profit from
  refurbishment, and that they will then receive a
  cut. Clearly, you have to have a good track
  record for refurbishing old houses, but if you
  do, it should be relatively easy to get a
  sponsor. There's a lot of money to be made from
  property, and commercial businesses understand
  this.

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• Bridging Loan
• Finally, you might not be able to secure a
  mortgage in time for the purchase, but the bank
  has offered you an Agreement in Principle,
  meaning that you will eventually receive the
  mortgage it's just that they take time. However,
  you owe the money straightaway. To cover the
  short fall between your mortgage going through
  and the payment being due, you can take out a
  bridging loan. They generally charge between 1
  and 2 for a 28-day loan.

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Thanks For your Time