Shawbrook initially launched this light refurbishment product to a limited panel including Searchlight. Now, normally you would fund the costs out of your own money, which can limit the number of projects you do.
Shawbrook will provide additional borrowing as long as:
Maximum initial loan 75% of lower of the purchase price or value. The total loan including purchase is not higher than 85% of the initial purcahse price or 70% of the end value.
A recent example for an experienced developer.
Purchase Price £150,000
Costs to refurbish £45,000
End Value £260,000
Day 1 loan of £112,500 – 70% of the end value is £182,000 and 85% of purchase price is £127,500 so maximum total loan based on the lower figure is £127,500. Deduct the initial loan of £112,500 and the developer has an extra £15,000 from the lender towards their build costs. This was put towards another purchase which previously they could not afford.
Commenting on this significant development, Emma Cox, Sales Director, Shawbrook Commercial Mortgages;
“We have worked tirelessly over the past five years to improve this important element of our product offering, and 2018 represents a real success story for the Shawbrook STL range. The ability to borrow 100% of refurbishment costs under one facility can be critical for investors looking to add value and develop their portfolios, and we are delighted to be able to support this activity.”
“While the product range continues to evolve in response to market demand, we have managed to keep all the old benefits in place to help our brokers and their customers build for the future. The 0.25% discount remains available for repeat borrowers with no minimum interest periods or ERCs, and we are also pleased to retain a great deal of flexibility for borrowers with the maximum 24-month term providing time to refinance or sell.”