Most people do not have a lot of cash lying around to invest in property development. They would have to make arrangements for property development finance in the UK. However, it's a broad term that covers a lot of grounds, like mortgages, property development loans, and even unsecured personal loans.
The eligibility criteria for getting the funding varies from person to person. Although the major eligibility criteria are that they should have a decent credit score, not have any existing loans, and have a steady, stable income.
There are several property development finance options that you can choose to avail. What are those options, and how would it affect your ability to repay the loan? These points are covered in today's article.
1-Cash in hand
This option is self-explanatory but is the least option chosen by many. Because nobody has cash lying around from which they would buy property. But if you have cash, professionals advise on using it to buy new properties.
2-Property development funding
This is a broad term that mainly covers two aspects. You can get funding for constructing a new property, and the other is to get funding for refurbishment. Although how much you get and how much you could pay back, you must discuss with your funding broker.
Always choose the best funding broker that has a lot of connections. This way you will get a lot of options to choose from.
3-Buy to let mortgage
If you plan to buy a property and then rent it out, the standard mortgage won't do you any good. Instead, you'll have to opt for buy to let mortgage.
The major difference between a conventional mortgage and buy to let mortgage is that you need to pay a higher deposit, have higher interest rates, and function only on an interest-only basis with conventional portage. The buyer needs to pay heavy fees.
Some buyers might have heard about this, while some might not have heard about it. Bridging loans are given for a short duration and charge higher interest rates.
Buyers who have an existing house and have not sold them opt for this loan. They are used to renovate a property and sell it. This way, the interest rate is also paid, and the loan amount is also cleared.
Which options should you opt for?
Depending on your plans and budget, you can choose from any one of the above. If you want to move into the new property, you're better off with the conventional loan. However, you must have a word with your financial advisor before taking up any loans.
If you're looking for a reputable service to get property development funding, then you can connect with our professionals from Hunter Finance. We understand your requirements and then suggest the best mortgage for you.
Robert Boren is the author of this article. For further detail about Property Development Funding in UK. Please visit the website: hunterfinance.co.uk