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.