There’s no doubt about it, if you know what you’re doing and are prepared to take some risks and put in some hard work, buying a property at auction can be a way to bag yourself a bargain. Auctions are particularly good if you are looking to pick up a property to renovate and sell on for a profit. Often these will be properties that have been neglected or on the market for some time.

The downside of an auction is that once the auctioneer’s gavel has gone down, you’ll only have 28 days to complete and that can put a traditional mortgage out of the picture. Instead, you are probably looking at a bridging loan, a way of getting money quickly to finance things like auction purchases or even when you are bridging a gap between the purchase of as property and the sale of another one.

The downside of bridging loans is that interest rates tend to be high. After all, the idea is that you will only need the loan for a short period of time. For example, the period before you can renovate and sell on your auction house “bargain” or you can sell your property to fund your next home. Since the financial crisis, traditional banks have become a lot more reluctant to loan money in this (and other) ways, but there are plenty of bridging loans out there to be had.

You need to tread carefully though as there are plenty of examples of people feeling they have been “ripped off” through, for example, failing to understand interest rates and the fees involved with bridging loans. Before you head for the bridge, head down to talk to us first!