As a Maidenhead mortgage broker, it’s probably no surprise that we’re asked a lot of mortgage-related questions on a daily basis.
However, from this vantage point, it’s very easy to spot new trends, themes and topics of interest, as the volume of questions about them simply increases. And one topic that’s garnering a great deal of interest at the moment is the Modern Method of Auction (MMoA).
Given that these four words were not on anyone’s lips as little as two years ago, our team of Maidenhead mortgage advisers feel it’s worth dedicating an article to it. It’s also worth highlighting that iam property, a UK property firm, reported that 9,487 properties sold via online action in 2023, up 35 per cent from 2022 – so it’s undoubtedly an area that’s growing.
So, let’s dig in to what MMoA actually is.
What is MMoA?
Firstly, you have traditional property sales, which are typically handled by estate agents. Then you have traditional property auctions. MMoA sits somewhere in-between the two.
Traditional property auctions are instant; contracts are exchanged immediately once the auction has closed. Traditional property sales via estate agents can take (as most of us painfully know) a long time.
MMoA, however, provides the benefits of a property auction but a bank of 56 days to exchange (28 days) and complete (another 28 days). This makes auctions, as a route to buying a property, accessible to a wider audience – and not just those with a large amount of capital in the bank.
MMoA provides a transparent bidding process and a way in which to grab a property quickly without having to navigate long and often precarious chains. More importantly, from our perspective at least, it provides buyers with a bit of breathing room to secure a mortgage.
Getting a mortgage for a MMoA
When we say a bit of breathing room, we really do mean a bit.
However, it’s a window in which MMoA mortgage brokers can really shine if they’re doing their job properly. And it’s another area of the mortgage world in which the benefits of using a mortgage broker are easy to see.
Let’s be clear, MMoAs are great for making property auctions more open to the masses. Although 56 days is still a relatively small window in which to complete – certainly when compared with standard completion timelines. What this means is that mortgage brokers have to work fast and strategically in order to get your mortgage over the line.
This is made even more time sensitive based on the fact that if the buyer withdraws from the sale, for any reason (even if it’s because they can’t get a MMoA mortgage), then they will lose the auction reservation fee, which generally sits somewhere in-between 3.5 – 5 per cent.
No time to waste
If you’re considering getting a MMoA mortgage, then our advice is to find an MMoA mortgage broker immediately.
Not only will they be experienced in managing MMoA mortgages, but they’ll also be able to help you get that all important mortgage in principle before you start bidding.
It’s also their role to liaise with the solicitors and ensure that all the timelines are managed to fit around the 56 days you’ll have once the hammer has gone down.
Thinking of buying at auction with a mortgage? Looking for help with property auction finance? Contact our team of Berkshire mortgage brokers for more information on 01628 560820 or by emailing enquiries@altonmortgages.co.uk.