🏠 Buying a Property at Auction with a Mortgage: What You Need to Know
Buying a property at auction can be an exciting way to secure a home or investment at a potentially lower price. But if you’re planning to use a mortgage to fund the purchase, there are some important considerations to keep in mind.
Why Buy at Auction?
Property auctions often feature homes that are:
– Priced below market value
– In need of renovation
– Being sold quickly due to repossession or probate
For savvy buyers, auctions can offer great opportunities — but they also come with tight deadlines and unique risks.
Can You Use a Mortgage to Buy at Auction?
Yes, you can — but timing is everything.
Most auction houses require completion within 28 days of the auction date. That means your mortgage needs to be approved, processed, and ready to go within that window. Traditional mortgage applications can take longer, so preparation is key.
Steps to Secure a Mortgage for Auction
1. Get a Mortgage Agreement in Principle (AIP)
Before bidding, speak to a mortgage adviser and secure an AIP. This shows how much you can borrow and gives you confidence when bidding.
2. Do Your Due Diligence
Make sure to:
– Review the legal pack provided by the auction house with your chosen solicitor.
– Arrange a survey or valuation prior to the auction date.
– Check for structural issues or legal complications that could affect mortgage approval – sometimes a property goes to auction because it is NOT suitable security for a mortgage i.e. it is not habitable in its current condition.
3. Speak to a Mortgage Broker like us
Not all lenders are comfortable with auction purchases. A broker like us can help you find lenders who:
– Work quickly.
– Accept auction properties.
– Can refer you to a specialist adviser if alternative finance is needed such as bridging finance or development finance.
Risks to Be Aware Of
– Non-refundable deposit: You’ll usually pay 10% on the day of the auction. If your mortgage falls through, you could lose this.
– Tight deadlines: Missing the 28-day completion window could result in penalties or losing the property.
– Property condition: Some auction properties may not meet lender criteria due to poor condition.
Final Thoughts
Buying at auction with a mortgage is possible — but it requires planning, speed, and expert advice. Working with a mortgage adviser who understands the auction process can make all the difference.
If you’re considering buying at auction and want to explore your mortgage options, book a call with an adviser by clicking here. We’ll help you navigate the process with confidence. https://onerooffinancial.co.uk/contact/
Your home may be repossessed if you do not keep up repayments on your mortgage.
Blog written: 02/09/2025
The information contained within this blog was correct at the time of publication (02/09/2025), and is subject to change.
