Many people are getting into the property development industry, but to kick-start their career, it is likely that they’ll need some sort of a loan. But, how do bridging finance, commercial mortgages and development finance differ? Click here for information about secured loans.
Our guide to funding options will help you make the right decisions!
Commercial Mortgages – 4.5% Interest
This type of loan is similar to the mortgage you would take out for your private property and payments are required every month for several years. However, this mortgage is used for commercial purposes only, including buying high street shops, warehouse or office. Find out more.
Property developers usually choose this type of finance to re-sell the property for a higher price once renovation has taken place.
The terms of this loan usually require a deposit that ranges from 20% to 40% of the asking price and again, like all loans, the interest rate will depend on the Bank of England Base Rate and fees that are charged by the lender. View information on mortgages.
Bridging Finance – 0.59% to 2% Per Month
Bridging loans is one of the most popular types of short term finance. Applying to a typical mortgage can take months, whereas a bridging loan will take several weeks, which is ideal if you have bought property at an auction and need to find remaining funds within 28 days.
Developers will have the option of repaying their loan at the end of the loan term or with refinance. At the end of the loan term, it is expected that developers would have finished their renovations and would be renting or trying to re-sell it. See more information.
If you’re looking for bridging finance in Surrey and surrounding areas, we recommend getting in contact with Hunter Finance. They have been a part of 150 completed development projects across the South East, and could even become a part of your process! Telephone 01825 749721 today.
Make sure to hire professional and experienced architects for your property developments – click here for more