Whether you are undertaking a regeneration project or constructing a large building, finance is the first thing that you will require to take a look at. Unless you have an astronomical amount of savings (which would be great, but who are we kidding here?), choosing the right property development finance service in the UK is the only way to proceed.
In this article, we will shed light on three different types of property development finance in Surrey and their use cases to help you understand when you should opt for them.
But, before we proceed any further, let's clear our basics by understanding –
What is property development finance?
As the name suggests, property development funding in Hampshire is large-scale funding provided by lenders to individuals who wish to develop a particular property. This may include anything from expansive regeneration initiatives to office block constructions and even residential housing projects.
These types of loans aren't provided for smaller developments, such as home renovations or property improvements.
Here are three common types of property development finance in Hampshire.
1- Commercial Mortgage
Commercial loans are taken for purchasing properties like shops, industrial units or offices. As long as a property isn't a private residential property, you can use a commercial loan to buy it.
Use case –
If you are currently running your business on a rental property and find an opportunity to buy it, you can opt for a commercial mortgage to purchase the same. This way, instead of paying the large amounts of rent every month on the property, you can use the money to pay out the monthly instalments of your mortgage.
2- Auction finance
This type of loan is used for buying auctioned properties.
Since most auctions require the bids to be settled within a specific period, opting for auction finance makes it possible for you to have access to large amounts of money in a short period of time.
Use case –
You gained an opportunity to buy a property at an auction at a discounted rate but are required to pay a secure and full payment within a few weeks. With auction finance, you can pay off the needed funds to the auction house.
3- Bridging finance
Bridging finance, as the name suggests, bridges the gap between buying a property and acquiring a permanent type of loan to finance it.
These types of loans are short-term loans and last a few months. However, the promptness of funding is what makes them attractive.
Use case –
You have an old warehouse that you wish to refurbish by doing some internal refitting. Since such property will take a few months from being purchased to becoming an asset generating property, bridging finance can help you cover the necessary refurbishing and refitting work.
Now that you are aware of three common types of property development loans in Surrey, it is time to connect with Hunter Finance to determine your eligibility. Their experts will navigate you through the complex procedure of property development finance seamlessly.
Robert Boren is the author of this article. For further detail about Property Development Loan Services in UK. Please visit the website: hunterfinance.co.uk