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Renovation and development finance

Our Mortgage Service - helping you make the right decision

"The essence of the Fair Mortgages service is professional independent mortgage and protection advice brought to you by a team of specialist advisers and experienced administration support. 

As your mortgage is such an important transaction, good advice is imperative.

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"We know that the internet is the first port of call for many people when looking for mortgage solutions; our view is, yes use the internet to do your own research , but then bring it to us and we’ll let you know how your findings compare and then give you the information and advice you need - so that you can make the right decision for your future.” Adam Arnott, Head of Mortgages & Protection

Renovation and development finance

Renovating a property can be a really rewarding process, both creatively and financially, but getting the finances in place to buy the property you want and to fund its improvements can present a challenge. If you want to renovate a property, whether to live in yourself, as a holiday let, or as a larger-scale commercial enterprise, but are unable to get a mortgage due to the property’s condition, then a bridging loan could help.

How does a bridging loan help with renovation and development finance?

A bridging loan is secured on a property and can be secured on either your current property or the property you are renovating. If you have sufficient equity in your current home to fund the purchase, you could opt to either use a bridging loan or to remortgage your existing property. There are advantages and disadvantages to both options - remortgaging is typically cheaper than bridging finance, but a bridging loan is easier to arrange.  You will need to carefully weigh up your options before proceeding.

Why choose a bridging loan for renovation and development finance?

There are many reasons why you might want a bridging loan. Most often, bridging loans are aimed at commercial and non-commercial property developers who might otherwise struggle to get a mortgage, in situations such as fixing up properties that are in a poor state of repair. Some examples of the types of property for which a bridging loan may be useful could include:

  • Property that you intend to renovate, but which is not currently inhabitable
  • Conversions – for example, barn conversions can be difficult to fund through conventional mortgages
  • Non-standard construction

Generally speaking, conventional mortgage providers will only lend on properties that are considered to be habitable at the time of purchase. To be considered habitable a property needs to have certain features in place such as being weatherproof and having functioning plumbing, so if you wish to add these features to a property such as a disused barn or warehouse, you may need to consider your financing options more carefully.

Another reason you might choose a bridging loan is flexibility – unlike mortgages, bridging loans can be used for any purpose and can be secured on many different types of property regardless of its type or construction.

If you are unsure about what bridging loan product is suitable for you to speak to one of our advisers click here »

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