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Property Development Mortgages

When it comes to property development mortgages, we have the tools to make it work.

Property development is a thriving business that offers many opportunities to build relationships with local surveyors, architects and legal minds. Establishing homes through flats, apartments and houses, your property developments truly impact the lives of those they house. It’s fair to say that property development is big business, involving huge sums of money just to get projects off of the ground. Here at Avail Mortgages, we seek to help investors, property developers and landlords expand their property portfolio and provide them with property development mortgages that can truly make a difference. Right from the start, our mortgage advisers take the time to get to know you and your project, to ensure smooth-sailing from here on out.

 

Using our Property Development Mortgage calculator, we can determine the best interest rate and mortgage loan deals for your business. Using our expertise, we can advise you on repayment options, and make you aware of any fees, rates and costs associated with your project. We’re not just mortgage brokers here at Avail Mortgages. We’re industry experts whose in depth knowledge of the market is trusted by property developers across the UK, as well as reputable mortgage lenders and our clientele.

For more information on our Property Development Mortgages, and to speak to our mortgage advisers, please contact us today. We provide loan support and mortgage advice for clients in areas such as Leeds, Huddersfield, Bradford, York and Harrogate, so we know that we can aid your project too.

 
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Getting A Mortgage For Property Development

A Property Development Mortgage, also known as development finance, is used to help fund large property ventures such as multi-unit blocks, apartments and plots of land on which you aim to build multiple properties. Also used for property conversions, renovations and regeneration projects, Property Development Mortgages can help provide property developers, investors and landlords with the finances they need to turn a pretty profit.

To help you get a mortgage for property development projects, the following steps are taken:

  1. We’ll conduct a fact find to learn about your property development, allowing us to appraise it and source the best possible mortgage rates from an array of mortgage lenders.

  2. Within this, we’ll provide you with ‘’indicative terms’’, and include a breakdown of any possible costs and fees.

  3. Should you agree to the indicative terms, we’ll start compiling the property development proposal and submit the mortgage application to the chosen mortgage lender. Information that we’ll ask of you will include:

    • Evidence of previous development projects.
    • Details of the planning consent including any restrictions, Section 106 or Community Infrastructure Levy requirements.
    • Drawings / plans.
    • Full breakdown of the development costs.
    • Expected end value of the project (known as the Gross Development Value).
    • Financial accounts.
    • Proof of identity.
    • Exit strategy (e.g. sale or refinance).
  4. Mortgage lenders typically like to meet the property developer to understand the project in greater detail and therefore, we can arrange a site visit between yourself and the mortgage lender.

  5. Following the site visit, we’ll submit a report on the property development project to aid the underwriting process. Should this be successful, and your mortgage application approved, your mortgage lender will issue a formal loan facility offer, which will detail the Property Development Mortgage, as well as interest rates, costs and fees.

  6. We’ll then arrange a valuation report to be carried out by a trusted property surveyor, who will comment on aspects of your property development, such as:

    • The value of the site in its existing condition.
    • Predicted build costs.
    • Anticipated gross development value.
    • Exit strategy – sale or rental potential on completion of the project.
  7. Following instruction from your solicitor, the mortgage loan application will be completed and the development finance arranged. The loan funds will start to be released, with interest only payable on the money used.

  8. When the property development project is completed, should the loan facility have an exit fee, this will need to be paid to the mortgage lender by the agreed upon date.

 

What Mortgage Do I Need For Property Development?

When it comes to Property Development Mortgages, the amount you can borrow is based on the gross development value (GDV) of the finalised project. The GDV is the value of what your development will be worth at the end of the project. Mortgage lenders usually provide up to 60-70% of the GDV and up to 75-80% of the total cost involved.

The duration of the mortgage loan is based on the scale and nature of the property development. The longer it takes to repay the loan, the more interest is charged, as interest is usually charged on a monthly basis. Interest can also be repaid at the end of the mortgage term – known as an interest only mortgage. It’s not uncommon to repay the loan in full by selling the property development, or by taking out another mortgage. When it comes to this, our specialist mortgage advisers can recommend the best route for you and your business.

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Property Development Mortgage Rates & Fees

When it comes to Property Development Mortgages, there are a range of costs and fees to consider, and these include:

  • Arrangement Fees: Arrangement fees are charged by mortgage lenders for arranging the loan and usually cost 1-2% of the property loan amount.
  • Exit Fees: Exits fees are paid to the mortgage lender to close the loan. Exit fees may be charged as a percentage of the loan amount, or as a percentage of the gross development amount. Exit fees on development finances cost approximately 2%.
  • Valuation Fees: As part of the mortgage application and risk assessment process, mortgage lenders will instruct a property surveyor to place a valuation on the property.
  • Interest Rate: The monthly interest repayments on the Property Development Mortgage loan can vary as the development of your apartments, multi-unit blocks, plots and land and property develops. As more funds are released, the monthly interest repayments may increase.
  • Professional Costs: It’s a given, but you’ll need to use other professionals during your property development project, such as architects, quantity surveyors, solicitors and project managers.
 
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At Avail Mortgages, we source the best rates for property development projects of all shapes and sizes, ensuring the Property Development Mortgage is extensive and covers your needs. Having been involved in some exciting projects, our mortgage advisers are best placed to help. Contact us today to find out more.

 

Get In Touch

For help with your Property Development Mortgage, we recommend getting in touch with Avail Mortgages today. From the mortgage application all the way through to the mortgage loan, valuation and beyond, we make the mortgage process a smooth one. Our mortgage brokers provide help for all types of property developments, including those located in Leeds and the surrounding areas of York, Bradford, Harrogate and Huddersfield. For mortgage advice and your own Property Development Mortgage, please contact Avail Mortgages today.