Refurbishment Finance

demolished room

Is the property not mortgageable due to its condition? Does it need a full refurbishment before selling the property? Then we can help.

It may need decoration, a new bathroom, kitchen, suffer from damp or needs rewiring. Do you want to add an extension or convert the basement or loft? Then we have lenders for you.

Do you want to convert single units to multiple units, commercial to residential, a single let to an HMO or a new build that requires completion?

We will guide you through the various options available to you whilst you build your portfolio.

Comparing Refurbishment Finance

  • What level of refurbishment will the lender accept.
  • Some work off a percentage of costs and others the work involved.
  • A light refurbishment is non-structural work.
  • Heavy refurbishment covers structural works, where planning permission/building regulations are required.
  • 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 and others take you to court to repossess before you know it.
  • Term of the mortgage – 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 is your exit, what is your Plan B, C  etc. Work on this before you apply for the loan.
  • 1 – 24 months.
  • Up to 85% of purchase price.
  • Up to 100% finance with additional security.
  • Refurbishment costs can be funded
  • Special products for HMO conversions, and change of use from Commercial to Residential.
  • Choice of daily or monthly interest rates.

Refurbishment Case Study

This is just one example and is based on the lender providing finance for the costs

  • Purchase Price £450,000
  • Initial loan on property is £315,000 (70%). 
  • Refurbishment costs are £150,000
  • Gross Development value £745,000.
  • GDV at 70% = £521,500
  • Less £315,000 initial loan gives a potential refurbishment loan of £206,500 less interest and fees.
  • This can cover 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.

Contact Us

At Searchlight we deal with developers of all sizes. Finance may be needed just on the value or the costs as well.

To see how we can help you contact us 01565 654005, book a call or use our enquiry form.

Your property may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.

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