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BTL mortgage for property BOUGHT in auction

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I have purchased a property in auction and am now looking at mortgage options in time for the completion of the purchase.

This will be my first property. I am looking to understand the actions I need to take to secure a BTL mortgage on this property (if even possible), and how long it can all take as I have around 4wks to completion. I know I have done this in the wrong order but am hoping someone is able to advise me on how to proceed...

Thank you in advance, Manny


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Hi Manny,

Yes, you have done this completely in the wrong order :(

First you'd speak to a broker to find out your options, get details and documents in place ahead of the auction and if your bid is accepted, the mortgage application is submitted straight away... 

I hope my message is not relevant by now and you have sorted things out since Saturday, but just in case you didn't, a few things to note:

- as a first time buyer first time landlord, there are only a handful of lenders who could consider the mortgage

- dependent on the property itself, the expected rent and your personal circumstances, you may or may not be able to get a mortgage

- whilst it normally takes 2-3 weeks to get a mortgage offer, it can take a few days or weeks to collect the necessary documents/info for the application and then at least another few days or weeks to get the money from the lender after the mortgage offer is issued, i.e. 4 weeks is cutting it very fine

- because of the above points, auction purchases are quite often financed by bridging loans, which are normally quicker to arrange and more flexible when it comes to property details. However, you will still need an exit strategy, eg. a plan to sell the property after refurbishment or to rent it out and remortgage to a BTL deal.

- the legal part itself normally takes 2-3 months, so your best bet is to choose one of the solicitors recommended by the auctioneers or a firm who deals with auctions purchases regularly

So, if you haven't already made a start, I'd recommend that you speak to a broker asap to check your options and then take things from there.

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Hi Lilla,

I have since spoken with a broker and have submitted details requested for an application to be put forward.

I shall discuss the potential of a bridging loan for my case with the broker, as it has not yet been mentioned, to find out whether I am more likely to be successful taking that route.

Thank you very much for your advice so far.

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