What Options Are Available for Development Finance?
When it comes to planning a property development, getting the best type of financing is crucial. In fact, the right property development finance will ensure that you get a good return on your investment so that your project reaches its goal. As you might expect, there are various options to choose from, and we’ll briefly enumerate them in the forthcoming paragraphs so that you can make a fully informed choice.
What Are the Main Types of Property Development Finance?
Considering that you’re constructing a home for yourself, this could mean that you have access to self-build mortgages. This type of financing allows you to get money for buying land, while covering some of the costs of the construction, per say. In this case, you would be able to live in that building.
Moving on to the amount of money you could borrow if you were to choose a self-built mortgage, this depends on several aspects. In general, self-build mortgages are utilized for residential new build projects.
It would be safe to say that bridging finance is, supposedly, the most popular type of property development finance. That is primarily because it offers a handful of benefits. For one thing, it is a fast, dependable way of raising a noteworthy amount of capital. At the same time, it’s worth considering that bridging loans offer you access to money in as little as up to seven days, which is really convenient.
What is more, considering that you don’t have access to other forms of financing, you might qualify for this form of loan. You may secure it on development sites or on property, which makes them excellent for property renovations, ground-up developments and other scenarios. “UK Development finance is a fast-moving and versatile sector,’ comments Mike Smith of Business Expert. “and there is a lower barrier to gaining finance than ever before.”
Another great thing is that a bridging loan allows you to borrow large amounts of money, especially in the case of large development projects. As for where you can get this form of financing, in general, private banks and intermediary subsidiaries are worth considering. On a different note, bridging finances are suitable for redevelopment projects, renovating or refurbishing existing homes, converting agricultural or commercial properties, as well as commercial and residential new built projects.
Another type of property development finance is the commercial mortgage. This financing is utilized primarily for buying properties such as industrial units and shops, or offices. Additionally, considering that you don’t want to invest in a private residential property, a commercial mortgage might address your specific needs. In fact, this is a very accessible type of financing, and it’s also easy to understand. In other words, it works similarly to standard private mortgages, incorporating standard payments, and a timeframe that is meant to address your specifications.
To conclude, we advise you to do plenty of research before picking a property development finance option over another. This is the only way in which you can be sure that you’ve made the best decision for your needs so that you promote financial growth.