Simon Nicholson

Expertly compared by Simon Nicholson

Products Updated November 5, 2018

Bridging Loans For Auction

If you wish to buy a property at auction and require bridging finance then our approved experts can help find you the right solution. They have access to a wide range of lenders who issue bridging loans for buying property at auction. Finance can be issued quickly from 1 month to 2 yer terms.

Our award winning bridging experts can find you the best deal from across the market. They have access to exclusive deals & rates.

Questions? Call us on 0161 820 8099

12 providers expertly compared:

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All credit types
Rated 5.0/ 5

Smart Money Why?
Why?

This provider is our Expert’s Choice in its category as it won tops marks for the following.

  • TRUST
  • VALUE
  • EXPERTISE & KNOWLEDGE
  • CUSTOMER SERVICE

Learn more about how we review and assess the providers here on Lending Expert.

Loan Amount
£10,000 - £10,000,000

Monthly Rate
From 0.49%

Loan Term
1 - 24 Months

Loan Type
Bridging Loans

Status
Homeowners Only
Max LTV 100%

Award winning broker of the year Smart Money have made it to the top of our list as our No 1 recommended provider for bridging loans. Smart Money are not available direct to the public and so we are very pleased to be able to offer them here via Lending Expert.

12 providers expertly compared:

Learn More Available via broker only
All credit types
Rated 5/ 5

Together

Loan Amount
£26,000 - £1,000,000

Monthly Rate
From 0.49%

Loan Term
1 - 12 Months

Loan Type
Bridging Loans

Status
Homeowners Only
Max LTV 75

A bridging loan from Together gives you the control to buy your new property quickly, even if there’s a break or delay in the chain. So you don’t have to miss out on the property you want. There are no monthly repayments to make, as interest is rolled-up for the term of the loan.

12 providers expertly compared:

Learn More Available via broker only
All credit types
Rated 5/ 5

United Trust Bank

Loan Amount
£10,000 - £10,000,000

Monthly Rate
From 0.55%

Loan Term
1 - 36 Months

Loan Type
Bridging Loans

Status
Homeowners Only
Max LTV 70%

United Trust Bank’s award winning Bridging department provides FCA regulated and unregulated short term loans for a variety of purposes, secured against a wide range of property.

12 providers expertly compared:

Learn More Available via broker only
All credit types
Rated 5/ 5

Shawbrook Bank

Loan Amount
£50,000 - £10,000,000

Monthly Rate
From 0.55% %

Loan Term
1 - 24 Months

Loan Type
Bridging Loans

Status
Homeowners Only
Max LTV 75%

A bridging loan is a short-term funding option which can help you ‘bridge’ the gap between the completion of a sale and accessing credit, meaning you avoid losing the home you have your sights on.

12 providers expertly compared:

Learn More Available via broker only
All credit types
Rated 5/ 5

Masthaven

Loan Amount
£100,000 - £5,000,000

Monthly Rate
From 0.68%

Loan Term
1 - 18 Months

Loan Type
Bridging Loans

Status
Homeowners Only
Max LTV 70%

Masthaven bridging loans are a short term lending solution for circumstances where speed and reliability are required. Used as an interim funding option for property purchases, quick release of equity or debt consolidation, we have a range of suitable options.

12 providers expertly compared:

Learn More Available via broker only
All credit types
Rated 5/ 5

Hope Capital

Loan Amount
£100,000 - £5,000,000

Monthly Rate
From 1.0%

Loan Term
1 - 24 Months

Loan Type
Bridging Loans

Status
Homeowners Only
Max LTV 75%

Hope Capital is a 100% privately funded specialist provider of bridging loans of up to £5 Million for a term of up to 12 months. They can offer up to 75% loan to value (LTV) loans on a short term basis.

12 providers expertly compared:

Learn More Available via broker only
All credit types
Rated 5/ 5

LendInvest

Loan Amount
£75,000 - £1,000,000

Monthly Rate
From 0.59%%

Loan Term
1 - 36 Months

Loan Type
Bridging Loans

Status
Homeowners Only
Max LTV 75%

Bridging finance with LendInvest allows you to quickly secure a property, generate short-term cash flow or fund building works. Get certainty of funding now, before selling on or securing longer-term refinancing.

12 providers expertly compared:

Learn More Available via broker only
All credit types
Rated 5/ 5

Octopus Property

Loan Amount
£50,000 - £2,000,000

Monthly Rate
From 0.60%%

Loan Term
1 - 36 Months

Loan Type
Bridging Loans

Status
Homeowners Only
Max LTV 70%

Octopus offer some of the largest loans in the bridging finance industry, ranging from £50,000 to £25 million. They also consider even larger loans for experienced property professionals.

12 providers expertly compared:

Learn More Available via broker only
All credit types
Rated 5/ 5

Greenfield Capital

Loan Amount
£25,000 - £5,000,000

Monthly Rate
From 0.65%%

Loan Term
1 - 12 Months

Loan Type
Bridging Loans

Status
Homeowners Only
Max LTV 70%

Greenfield Capital was born in 2011 out of a requirement for common sense underwriting in bridging, a need for excellent service and integrity. Unlike many lenders in the market today Greenfield do not have arbitrary strict criteria to satisfy.

12 providers expertly compared:

Learn More Available via broker only
All credit types
Rated 5/ 5

Bridgebank Capital

Loan Amount
£125,000 - £10,000,000

Monthly Rate
From 0.85%

Loan Term
1 - 12 Months

Loan Type
Bridging Loans

Status
Homeowners Only
Max LTV 70%

A bridging loan is a short-term funding option which can help you ‘bridge’ the gap between the completion of a sale and accessing credit, meaning you avoid losing the home you have your sights on.

12 providers expertly compared:

Learn More Available via broker only
All credit types
Rated 5/ 5

Mint Bridging

Loan Amount
£75,000 - £5,000,000

Monthly Rate
From 0.75%%

Loan Term
1 - 18 Months

Loan Type
Bridging Loans

Status
Homeowners Only
Max LTV 80%

Mint Bridging provide loans to meet the exact needs of every borrower. They are a unique provider of individually structured, short-term finance for property purchases, developments and general capital raising requirements.

12 providers expertly compared:

Learn More Available via broker only
All credit types
Rated 5/ 5

Funding 365

Loan Amount
£1,000,000 - £25,000,000

Monthly Rate
From 0.65%%

Loan Term
2 - 18 Months

Loan Type
Bridging Loans

Status
Homeowners Only
Max LTV 75%

Funding 365 is a London based bridging lender who provide bespoke 3 to 12 month loans from £100,000 to £5m plus, secured against properties across England and Wales. Rates start at just 0.65% for residential investment properties and 0.75% for commercial properties.

About Bridging Loans for Buying Auction Property

Bridging loans are a useful finance option for auction sales

Bridging loans are a useful finance option for auction sales

Property auctions are popular for sellers who want to sell their property quickly and hassle-free. Often they will be open to accepting a lower price than what they could achieve from selling the property traditionally. This makes property auctions a great place to grab a bargain property very quickly, with no complications such as lengthy chains and mortgage applications.

One of the main reasons many people are hesitant to purchase a property at auction is that they struggle to get the money to fund the purchase quickly enough. If you don’t have large enough savings to purchase the property at auction outright, it can be challenging to find the funding as there usually isn’t time to go through the lengthy mortgage process. This is where bridging loans for buying auction property can come in useful.

What is a bridging loan?

A bridging loan is a short-term finance option that can be used to bridge the gap between more permanent funding options, making them great for purchasing property at auction. They offer loan durations between 1 day and 12 months, making them a short-term solution that can be obtained quickly and easily.

Most bridging loan lenders are able to process applications and release funds within a matter of days, which is ideal if you are planning on purchasing a property at auction. Bank loans and mortgages can also be used for purchasing at auction, but the major benefit that bridging loans have over these is that the application process is much shorter and funds can be released much faster.

Requirements of a bridging loan for buying auction property

If you are over the age of 18 and purchasing a property, the chances are you will be approved for bridging finance. Usual criteria such as income and credit checks are less important to bridging loan lenders as they use the property being purchased as security. Many lenders will even consider those with poor credit history, as the property can be used as collateral in the event of a default on the loan.

Many properties for sale at auction are often run down and in poor condition, and unlike with mortgages, bridging loans can be taken out against properties that are in need of repairs and renovations. If you are looking to purchase a property at auction, with the view to renovate it and then sell it on for a profit, a bridging loan can be the perfect option for bridging the gap between buying the property and reselling it once the work is complete.

What can I receive with a bridging loan for buying auction property?

The majority of bridging loan lenders will lend up to 70% of the value of the property you are looking to purchase, leaving the remaining amount to be funded by yourself. This will depend on the bridging loan lender and your circumstances as a borrower. Usually, there is no maximum loan amount as it is completely dependent on the property’s value, although must bridging loans will have a minimum loan amount of between £10,000 – £30,000 loans.

You can choose between a structured interest rate, rolled up interest rate or retained interest rate, and depending on which option you go for will depend on the amount of interest you end up paying on the loan. Interest rates for bridging loans are usually higher than with traditional bank loans or mortgages because of the short-term nature of them. In addition to high-interest rates, bridging loans usually incur additional charges including arrangement fees, valuation fees, broker fees and exit fees. This makes them a more expensive yet convenient option for purchasing property at auction.To get an estimates of the costs use our bridging finance calculator and see the monthly repayment, interest charges and the total amount payable. Our bridging experts here on Lending Expert can compare bridging finance to find you the best deals and lowest rates.

Advantages of using a bridging loan for buying an auction property

  • The application process is quick and simple compared with bank loans and mortgages
  • Funds can be released in a matter of days in some cases, making them ideal for purchasing at an auction with little notice
  • If you are planning on buying a property at auction for developing and reselling, some bridging loan lenders will base the loan amount on the property’s development value as opposed to the current value
  • Auction gives you the added benefit of being a cash buyer with no chain.

Disadvantages of using a bridging loan for buying at auction

  • Interest rates and additional charges are high compared with bank loans and mortgages
  • They can be easy to default on as the high-interest rates, and short-term durations can be difficult to keep on top of
  • You will need to rely on a longer-term finance option or reselling a property as an exit plan
  • If you do end up defaulting on a bridging loan, it will have a negative impact on your credit score affect future borrowing.

 

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