WHAT IS DEVELOPMENT FINANCE ?
There are several kinds of loans available in UK among which the loan seeker can choose according to his/her needs. Private Property mortgages, Buy-to-Let mortgages, Commercial mortgages, etc. are some of the well-known examples of Mortgages in UK. Another type of Mortgage in UK is Development Finance. The Mortgage borrower must have a piece of information about the mortgage types before opting for one. Let us understand more about Development Finance in this piece of article.
Development Finance in UK is a type of loan with a duration of usually 6-36 months and serves altogether a different purpose. Development Finance provides funding for a short period of time for purposes like construction, renovation, etc. Thus, the term “Development” in Development Finance stands for the refurbishment of the property. The construction or reconstruction is done for all kinds of properties like Private Properties, Commercial Properties, Buy-to-Let properties, etc. and hence, the Development Finance is appropriate for all these types of properties.
How do you get Development Finance?
To seek a loan for the development process, i.e., Development Finance, the borrower must have all kinds of paperwork and formalities ready. The developer of the property must submit an application seeking finance along with the details of the property. The developer should also provide information about the property including its cost, expense of the development project, fees of the professionals, raw material costs, etc.
How much Development Finance can I get?
The amount of the finance upon which the Finance lender and borrower agree is calculated on the basis of several aspects like the current value of the site that is being developed, the cost of the build including all the expenses, GDV- Gross Development Value, which is the value of the project after completion, etc. Therefore, the lender and the borrower agree to a number that is beneficial for both parties.
