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Development Finance

Choosing a Mortgage Broker for Property Developers | Best Tips for Property Financing

Professional broker working with draft in office

As a property developer, securing the right financing is critical for your success. Choosing a skilled mortgage broker can make all the difference in ensuring your projects run smoothly and profitably. In this guide, we’ll discuss the key factors you should consider when choosing the right mortgage broker for property development projects.

Industry Expertise -Property Development Finance

A mortgage broker’s experience in the property development sector can greatly influence your financing options. Specialised brokers understand the intricacies of development finance, bridging loans, and buy-to-let mortgages. They know the lenders to approach and the ones to ignore.

Access to Specialist Lenders for Property Developers

Look for a broker with access to a wide network of lenders products, including those lenders who only accept business from qualified brokers.

Transparent Fee Structure

Understanding how your broker gets paid is crucial. Make sure they provide a clear, transparent fee structure and when fees are payable. It will either be commission or a fixed fee or a mixture of both. There may be an upfront payment, brokers can charge on application, offer or completion.

Understanding Regulation and Qualifications

Ensure your mortgage broker is FCA-regulated and holds relevant qualifications like CeMAP. Also a trade membership where the broker has been vetted such as National Association of Commercial Finance Brokers.

This is where it sometimes gets confusing as unless you are going to live in the property,  development finance is not regulated by the FCA but some lenders require the regulation to accept the broker onto their panel.

Quite often I will see a broker saying they don’t have access to a particular lender and usually quote service issues. In reality it’s usually because the lender will not accept the broker due to the lack regulation.

There are various trade bodies but some just accept membership when you pay the fee and no vetting process takes place.

Bridging Finance for refurbishment of property

Light Development Finance

This is ideal for professional developers. You have the deposit, can cover the interest and fees, but could do with some help on the refurbishment costs. This product may be perfect for you.

A minimum loan size of £200,000 with a Day 1 loan of up to 75% LTV and a projected gross development value of 70%. You need a minimum of 20% profit on all costs.

Up to 100% of costs of works funded in arrears so you need working capital to cover the first 4-6 weeks of costs, the deposit and the fees.

Permitted uses for the product:

  • PDR schemes
  • Property conversion to residential / HMO
  • Heavy property refurbishment and extension
  • Finish and exit

It’s not for ground up development as we have other lenders for that. Legals and valuation at cost with no lender mark up.

Contact us now for a detailed quote.

Light Refurbishment Finance

Has your BTL mortgage been refused due to the condition of the property?

Improve the value and the rent on a tired property. Whether it be a new kitchen, bathroom, damp, electrics we have lenders for all of them at competitive rates up to 85% LTV with experience and 75% without.

Contact us for refurbishment finance options.

Searchlight Finance Ltd is a broker not a lender.

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We are a credit broker not a lender.

Searchlight Finance Ltd is registered at 98, King Street, Knutsford, Cheshire, WA16 6HQ. Company Register number is 07929050.

Authorised and Regulated by the Financial Conduct Authority. Our FCA registration number is 743220. You can check via www.register.fca.org.

We are registered with the Information Commissioner’s Office, Z3109319 and you can check via www.ico.org.uk.

We conduct both regulated and unregulated business and therefore not all products provided through us are regulated by the Financial Conduct Authority.

We source finance from the whole of market and may receive commissions that will vary depending on the lender, product, or other permissible factors. The nature of any commission model will be confirmed to you before you proceed.

Member of National Association of Commercial Finance Brokers (NACFB).