Heavy Refurbishment Finance
Heavy refurbishment finance is a type of bridging loan which enables property investors and developers to redevelop or convert a property so they may either let it or sell it for a profit. It may be used for the refurbishment of residential and commercial property.
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What is heavy refurbishment finance
Heavy refurbishment finance is a type of bridging loan which enables property investors and developers to redevelop or convert a property so they may either let it or sell it for a profit. It may be used for the refurbishment of residential and commercial property.
Heavy refurbishment loans are for projects that require structural works and where the build cost is a significant portion of the original property value.
Which lenders offer this finance?
Refurbishment finance is a specialist bridging loan, it is available via commercial and specialist lenders who understand property construction.
These lenders can be part of a high street bank, building societies, backed by funds or family offices.
Many do not actively promote themselves to the public and work with carefully selected broker partners.
How much can I borrow with a heavy refurbishment loan?
Generally, you can borrow up to 75% – 85% of the purchase price or property value, plus 100% of the refurbishment costs. However, 100% finance can be available if another security is made available.
Lenders structure their lending according to their own criteria, we will work with you to fulfil your requirements in a way that suits your needs.
All lenders have their own criteria and products, we can quickly match up the correct lender depending on the level of work required, geographical location and your own property development experience.
What is the cost of a Heavy refurbishment loan?
Lending rates vary significantly and change on a regular basis. It is important that you work with a broker that is aware of these changes, so they can arrange finance which is both deliverable and cost-competitive.
Generally, interest will be rolled into the loan, therefore no monthly interest payments will need to be serviced. The interest is repaid on the refinance or sale of the property along with the original loan balance and any arrangement fees that were added to the loan.
Some lenders charge exit fees, which we consider the lowest total cost solution.
Can I do structural work with a heavy refurbishment loan?
Heavy refurbishment are designed for projects where no structural work will occur.
- Loft Conversions
- Rear and side extensions
- Basement extensions
What can I use a heavy refurbishment loan for?
- Conversion of a house into flats
- Commercial to residential conversions
- Residential to HMO conversions
How long does it take to arrange?
We can arrange and complete heavy refurbishment loans in a matter of days but for the most competitive loans, 2 – 4 weeks is normal.
Refinancing a completed project?
Where the planned repayment of the loan is a refinance, then a buy-to-let mortgage could allow you to refinance up to 75% or perhaps 80% of the property’s new market value.
Beware that many lenders may have a 6-month rule, this means you may have to own the property for 6 months before being eligible to refinance.
We have lenders that are quite comfortable with a refinance before 6 months have passed.
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