GET IN TOUCH:
INFO@EASTGATE.FINANCE | 07933 766 118
GET IN TOUCH: INFO@EASTGATE.FINANCE | 07933 766 118
Development finance in short term facility that tends to be used for ‘ground up’ developments or where the level of refurbishment works are substantial.
Lenders generally look to support experienced developers with a proven track record in property development, although, if it’s your first major project, then there are still options to consider.
A conventional mortgage is assessed based of the property’s current value, whereas development finance is assessed based on the estimated completed value of the development- otherwise known as the Gross Development Value or GDV.
A lender will be prepared to lend up to a certain % of the GDV and funds will be released in stages as the development meets key points, such as becoming ‘wind and watertight’. Often the lender will monitor the progress of the build to ensure the project is on track and good quality.
Depending on your long term aims the loan will typically be repaid on completion of the works via either of the below:
This is a complex product and lending appetite varies across the market. The applicant’s development experience, their available contribution, location and size of the development will all be key considerations for any prospective lender.