Development Finance / Loans and interest costs explained - How to get the best deal?
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- เผยแพร่เมื่อ 8 พ.ย. 2024
- Beginners guide to development finance. How it works, likely costs and how to prepare.
It's vital you are well prepared before formally applying.
Talk to an expert to get indicative costs and interest rates for your project or to help you get in shape for an application
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1st charge, 2nd charge and even 3rd charge
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PROMISE MONEY 01902 585020
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Representative example
66% of our clients get these rates or less - (This is not a specific example of this product above)
£63,000 over 228 months at an APRC OF 6.1% and an annual interest rate of 5.39% (Fixed for five years - variable thereafter) would be £463.09 per month, total charge for credit is £42,584.52 which includes a £2,690 broker / processing fee. Total repayable £105,584.52.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
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updated8/2/23
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Cleare and simple to comprehend, thanks 🙏🏽
Cheers Guy - check out the video on converting commercial property - it's an outstanding product to minimise cash requirements if you are looking at conversion to residential
Brilliant Steve! Straight to the point and Easy to digest information. Thank you
Realistic and informative video. Great content, I'm looking forward to seeing more of these videos.
very helpful, thanks
Glad it was helpful!
Well done
🎉🙏🏼
Is there any kind of finance strategy that would allow me to buy a commercial property at 500k and the £150k to develop and pay costs and stamp duty, with no money down? My money is tied in to a foreign property (175k) that may take a year to sell. My current home is worth £1mil and i owe £550k there. But im not sure i can re mortgage for more. The commercial property would be worth 900k when done. Im trying my best to get a deal started but i cant find a solution
I can think of a away that can be done. Every lender expects you to have skin in the game. If you cant put in cash then they would look for additional security in the UK.
I am not sure if you plan to convert the commercial to residential - if so, AND planning is granted, AND you are an experienced developer, you could potentially raise circa 75% of the purchase price on development finance. (inexperienced developer max 70% LTV)
That leaves you needing enough to cover the deposit (£125K), lender fees, legal, valuation, stamp etc( 15-20K) and the first phase of the conversion (say £40K - you could draw the rest as you go) The lender I am thinking of adds the interest to the LTV rather than deducts it so that helps - but only on residential conversions
So around £140K could be taken as second charge loan on your home - subject to affordability. Second charge bridging would leave you light as the interest is deducted.
There are other thoughts but suggest you speak to someone who can explore in more depth.
If you plan to retain the property as commercial I think you have a big challenge.
@@PromiseMoney1 thanks for such a detailed reply, your time is appreciated. This property is 3 agri barns with planning to convert to industrial, i have an industrial estate currently at home so i am proven. And yes i do want to add it to the portfolio. My plan would be to do the work, sign FRI leases and then revalue and borrow against that to pay off the finance. I think frankly im out of options until ii sell the property in spain then. Its a shame as my business is groundwork and industrial construction.. a match made in heaven but short of knowing somone with 650k im out of lucknat this time
@@missionDan it sounds tricky but good luck
Crazy to do that currently with rates and materials as they are
@@aldozilli1293 nahh the time to do it is as soon as you can afford it. Materials are dropping in price all the time. Dont forget these rates today are just about cheap compared to what they should be.. either way i found two investors and put together a full proposal but they were dreamers in the end never got back to me. But it is what it is. Villa now on market and i can do whats needed with my own money