Funding for auctions needs to happen quickly, but that doesn’t mean you should rush into choosing a lender. It makes sense to compare different loan providers and ensure you are comparing “like for like” terms. The headline interest rate does not give you the full story. If you’re not sure where to start, have a look at these simple questions…
What are the costs?
- What are the arrangement fees and monthly interest rates? Check if interest is calculated daily or monthly.
- Are there any upfront commitment fees? Are there any exit fees?
- What are the minimum and maximum periods of the loan? What happens if you go over the maximum term of the loan – are you charged more fees and does the interest rate change? Some loans are for as little as 3 months with ‘teaser’ interest rates to draw you in……..
- What are the legal fees and valuation fees? If a lender is offering “free legal” and “free valuation”, check if they are not just being replaced with insurance premium fees that can often be more expensive and you lose the benefit of an independent RICS survey of the property you are purchasing.
- Are there any hidden charges and what’s the overall cost?
How much can I borrow?
- What Loan to Value (LTV) is being offered? Find out if the loan to value is based on with or without fees included.
- Are there minimum loan sizes?
- Is the Loan to Value (LTV) based on Open Market Value, 180 Day or 90 Day Value?
- What is the Net Amount you will receive?
Speed and service
- How quickly can you expect to receive funds?
- Does the lender have restrictions on property type and condition of the property?
- Does the lender have a long track record of delivering on full and in time?
- Is the lender regulated by the Financial Conduct Authority, giving you the comfort of ‘Treating Customers Fairly’ regulations?
- Can you pick up the phone and speak to a person who can make decisions? Personal, friendly Service comes as standard at BFS.
We encourage you to compare us with other lenders and if you have any queries, get in touch and we’ll be happy to help.