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Financing Property Development Project
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I'm thinking of buying a house to do up and sell on. I'd have to borrow about 80% of the purchase price of the property. Can anyone please advise if it's best to borrow from a normal mortgage lender, or should I use a specialist development loan company? What are the advantages either way?
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The advantage of a specilaist development loan company is that you can get 'rolled up' interest - which means that you don't have to pay any interest until the development has taken place. They may also give you 'staged drawdown' which means you borrow the money at different stages according to the work that needs doing - and of course you only pay interest on money that you have borrowed.
The advantage of a normal mortgage lender is that it may be slightly cheaper on the case rate (though not necessarily cheaper considering the above).
If you go to a finance broker, they should be able to give you quotes on both
The advantage of a normal mortgage lender is that it may be slightly cheaper on the case rate (though not necessarily cheaper considering the above).
If you go to a finance broker, they should be able to give you quotes on both
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