100% Development Finance
Our Development Finance Service Provides:
- Development finance from £100,000
- Finance for: New build, conversion, minor & major refurbishment
- Residential developments of all types
- Up to 65% GDV finance available
- Up to 100% development cost finance available
- 100% joint venture finance available for experienced developers
Call our property development finance team on 0117 313 6058
What is 100% development finance?
100% development finance refers to funding for building projects which covers 100% of the costs of the development, including the cost of the site, all materials, labour and professional fees.
Many lenders do not offer 100% finance, so developers who want to go down this route may need to borrow from an alternative lender who specialises in development finance. This kind of lender will normally not be available directly to the public, meaning you will likely need to work through a loan broker to access 100% development finance.
In general, 100% loans for development purposes will only be offered to those with experience in property development. You are more likely to be approved for a 100% loan if you can put up additional security in the form of other property. An experienced loan broker will be able to advise you on which lenders are most likely to lend in your particular case.
How 100% development finance works
Development finance is normally taken in the form of a bridging loan, offered for 12-18 months. The money will then be released in stages to coincide with certain key points of the build being reached, such as finishing the foundations and getting wind and water tight.
Interest is only charged on the money you have already received, so taking the loan in instalments can make borrowing cheaper as well as reducing the lender’s risk.
You will usually be required to have an exit strategy in place when applying for a bridging loan for property development. This explains how you will repay the loan when the loan terms ends. This is normally done by refinancing or by selling the finished development.
Applying for a development loan
To apply for a development loan, you will generally need:
- Details of your income, expenditures, assets and liabilities
- Bank statements
- An estimated value for the final project (arranged by the lender)
- A detailed breakdown of costs
- A development timeline
- All relevant planning permission documents
- Building regulations consent
- Your National House Building Council (NHBC) insurance details or an equivalent
- Your exit strategy for repaying the loan
Different lenders have their own criteria and may need you to supply extra information on top of these standard requirements.
How much does 100% development finance cost?
How much development finance will end up costing depends on a variety of factors. These include:
- How much you borrow
- How long you take to repay
- Your level of development experience
- Your credit rating
- Your loan to GDV ratio (GDV is Gross Development Value i.e. how much the development will be worth when completed)
All of these factors will influence the interest rate you are offered. This will then determine your monthly repayments which are normally interest only on this type of loan.
You will also normally have to pay an arrangement fee at the start of the loan and may have to pay an exit fee when you repay the loan. These are both normally based on a percentage of the total loan value.
Compare 100% development finance deals
To get the best possible deal on your development finance, it is highly recommended that you use a loan broker. They will be able to advise you on which lenders offer the best rates for your requirements and give you access to specialist lenders not available on the high street.
Fair Loans’ team of highly experienced loan brokers can help you quickly find the best possible value on the finance you need, helping you to get a fair deal, fast.
To find out more, call Fair Mortgages today on 0117 313 6058 or use our contact form for a quick response.