Refurbishment Bridging – Works Funded
We have access to market-leading rates for experienced property professionals who want to refurbish a property and require money from the lender to carry out the works. Most lenders will just do the property but there are several who will do both.
This product is suitable for heavy refurbishment, extensions, conversions, permitted development and structural works.
POINTS TO CONSIDER WHEN LOOKING FOR REFURBISHMENT BRIDGING
- Term of the mortgage, as often lower rates are quoted for shorter terms but if you don’t repay on time the rates can be much higher;
- Can your solicitors be instructed the same day or can you use the lender’s solicitors to save you time;
- What level of refurbishment will the lender accept ;
- Don’t just focus on the interest rate. Add all the costs up to compare one lender to another;
- If using a broker ensure they fully understand bridging and don’t go through a third party. This will increase the costs and be slower;
- What happens if you are late when repaying the loan? Some lenders are flexible others will be in court to repossess before you know it;
- What is your exit, what is your Plan B, C etc. Work on this before you apply for the loan.
- Up to 24 months;
- Up to 75% of lower of the purchase price or Day 1 value;
- Up to 100% of build costs as long as the total loan is no more than 70% of Gross Development value (GDV);
- Refurb costs limited to 50% of the purchase price;
- Experience with two similar projects essential;
- Daily interest rate calculation;
- Regular visits from the lender to monitor progress;
- Fee-free options.
The minimum loan is £250,000.
Purchase Price £450,000 and initial loan on property £315,000 (70%) and interest added not deducted.
The refurbishment costs are £150,000 and GDV £745,000. GDV at 70% = £521,500 less £343,000 initial loan including interest, gives a potential refurbishment loan of £178,500.
This covers 100% of the build costs.
We also have options for lower-priced properties where the day 1 loan is 75% and the works funded are the lower of 85% of purchase price or 70% of GDV.