Property Development Finance

What is property development finance you ask? Property development finance is funding for either expansive new building projects or comprehensive renovations. Examples include, new housing estates, luxury homes, office blocks converted to flats, etc. It works for residential, commercial and mixed use property.

Development finance works differently to your traditional mortgage. Usually, lenders assess the value of the property and then offer a loan based on the value as well as the eligibility of the borrower. For development loans, to assess value, they work on a predicted value figure of the completed development.

Development finance typically operates as an interest-only, draw-down facility and the term of the loan would  depend on the size and nature of the project. Usually the interest on a development loan is capitalised within the development period, with the entire loan inclusive of interest charged being repaid upon the sale of the property. Usually the interest can be rolled up into the loan, so there are no monthly payments.

If you’d like to know more or ask any questions, feel free to get in touch with Seamless Broking.