Whether you’re looking to build a new property from scratch or renovate an existing property, you may need to obtain property development finance to fund your project. Property development finance is often referred to as a ‘development mortgage’ or ‘property development funding’, and it’s typically used for development projects when a standard mortgage product isn’t appropriate or available. In this guide, we’ll give you some background into property development finance and explain how to go about securing your development mortgage.
What is Property Development Finance Used For?
Development finance can be used to fund the construction or renovation of residential or commercial property. This may also include the initial purchase of land and other costs involved with the project, such as marketing costs or surveying fees.
Which Type of Property Development Finance Do I Need?
There are many types of property development finance available, including ground-up development finance, short-term bridging finance, heavy refurbishment finance, light refurbishment finance, and development refinancing. Selecting the appropriate development funding for your project can be done by your broker once he or she understands your specific requirements – our advisors can evaluate your project and suggest the most appropriate development mortgage and lender to meet your needs.
How Do I Get Property Development Finance?
In this section, we’ll explain the four steps to getting your development mortgage. Our brokers are ready to help you, so please get in touch if you’d like to talk through these steps in more detail.
Prepare for Your Development Mortgage Application
Gathering your documents and plans as early as possible may help the process go smoothly. However, you won’t need to present your broker with the finished plan, as he or she should help you polish your plan to give you a better chance of a successful application. Here are the key documents you’ll need to prepare:
- Photo ID
- Proof of address
- Financial documents such as banks statements and/or tax calculations
- Your up-to-date credit report, which you can download from Check My File.
- Details about your development project, such as the purchase price, construction costs, other fees and costs, planning permission details, and exit strategy details.
Speak to a Development Mortgage Broker
It’s never too early to speak to a development mortgage broker, so if you want guidance on how to prepare documents and plans for your project then we recommend getting in touch with one of our development experts as soon as possible.
Your advisor will assess your situation and recommend an appropriate development finance lender based on your needs. Your advisor will also help to construct your plan to show your proposition in a good light to lenders.
Apply for Your Development Mortgage
Your development mortgage advisor will work with you to polish your proposal and construct your application. He or she will then apply for your finance on your behalf and liaise with your lender to help the process run smoothly, whilst keeping you in the loop every step of the way.
Access Your Funds
As development loans are usually a short-term form of borrowing, you’ll typically be able to access your funds quickly, often within a single working day after your application has been accepted. Allowing you to potentially purchase land or begin funding your development project as soon as possible.
The Bottom Line
Property development finance can give you the funding you need to construct or renovate a property. There are many different types of development mortgage each offering slightly different benefits, and your broker can help you select the most appropriate product for your situation. We’ve outlined the four-step process to getting development funding above, but feel free to chat to our team of experts to get more information about the next steps.
At Michael Usher Mortgage Services, we’ve been helping our local community for over 30 years! We offer a comprehensive range of products from across the market, including specialist deals that aren’t available directly from lenders. We’ll find a deal that suits your needs, guide you through the process, and liaise with your lender, estate agent and solicitor to ensure your application goes smoothly. We can also help to protect your mortgage with our FREE Insurance Service.
Talk to one of our friendly mortgage advisors for free to get going quickly. Our head office is on Frimley High Street, but we can also help you remotely via phone or video call if you’d prefer. We look forward to chatting with you!
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Your home may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice. The precise amount will
depend on your circumstances but will be agreed with you before
proceeding.
