Auction finance, provided by Fundd, is a specialised type of loan designed for those looking to quickly purchase property at auction. It is a short-term financial solution that allows bidders to have the necessary funds in place to complete a transaction within the typical 28-day completion period required by most auction houses.

Like bridging loans, auction finance is secured against the property being purchased. Borrowers must have a deposit or sufficient equity in another property, and some lenders, including Fundd, may allow the use of equity from other properties to decrease the needed cash deposit. Fees and interest are applied throughout the term of the loan.

Fundd’s clients often seek auction finance for the rapid acquisition of property, bypassing the slower processes associated with traditional mortgages. This type of finance is ideal for:

• Purchasing property at auction where quick payment is mandatory.
• You’ve found a great deal or a rare opportunity and you need to close quickly
• You’re buying a property at auction and need to pay for it within the 28-day deadline.
• Capitalizing on unique investment opportunities that require immediate action.
• Acquiring properties that need refurbishment and are unsuitable for standard mortgages due to their condition.
• Leveraging equity in an existing property to facilitate a quick purchase.

Auction finance terms with Fundd can range from a few months to up to 24 months, offering flexibility to suit various investment strategies. Interest rates are generally higher than conventional mortgages due to the short-term and fast-access nature of the loan. Repayment strategies might include refinancing, selling the property, or using other raised funds. The loan is secured against the property, with the risk of repossession if repayments are not made.

Fundd provides auction finance ranging from £50,000 to £15 million, with borrowing limits influenced by the borrower's asset value and income.

Maximum loan-to-value (LTV) ratios typically cap at 75%, although leveraging substantial equity across a property portfolio could allow for higher borrowing amounts, potentially up to 100% of the auction purchase price.

The cost of auction finance with Fundd includes higher interest rates compared to traditional mortgages, reflecting the short-term nature and expedited access to funds.

Rates vary between 0.39% and 1.5% monthly, depending on the lender. Additional costs include product fees and potential exit fees for early loan closure. Some lenders might charge interest upfront, with possibilities for refunds on early repayments.

Fundd can arrange auction finance swiftly, often within hours, with funds released in a few days, catering to the urgent nature of auction purchases. The process is streamlined with electronic identification, automated property valuations, and electronic signatures to facilitate quick approvals.

Auction finance is crucial for investors facing tight deadlines, offering the speed and flexibility that traditional mortgages cannot match.

Despite its higher costs, it is a valuable tool for seizing time-sensitive investment opportunities. Fundd enables easy comparison of auction finance options, helping clients find the best deals and manage costs effectively.

Fundd’s tools allow easy comparison of auction finance options based on loan amount, property value, and loan duration. This comparison is vital to find not just the lowest rates, but also the best terms considering fees, exit strategies, and lender flexibility.

Choosing the right lender through Fundd involves considering factors beyond just the interest rate. The optimal choice depends on individual circumstances, including speed of funding, lender flexibility, and additional product features that suit the borrower's specific needs and investment strategy.