The facility allows borrowers to pre-arrange finance secured against a residential property, or portfolio of residential properties.
Using the facility, property buyers can attend an auction, or put in an offer to purchase, and bid with an agreed maximum level of finance already in place.
Once the facility has been arranged, borrowers must provide 24 hours notice and funds can be released into a pre-agreed bank account, without solicitor involvement. During the term of the facility, the borrower has the ability to draw and repay funds as and when required.
Financial intermediaries earn procuration fees on the initial set-up of the facility in addition to each drawdown. The product has a nine month duration and a combination of first and/or second charges are accepted, with a blended interest rate depending on the mix.
Gavin Diamond, finance director at Cheval, said: “This facility gives bidders the flexibility to buy what they want, even un-mortgageable properties. In one leap it overcomes the recurrent auction problem of bidders being restricted because they are uncertain of the finance that they can call on.
“They can now focus more fully on getting the property they want at the price they want, rather than being bogged down by the mechanics of obtaining finance.”
