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A Property Development Mortgage Can Quickly Be Found Online With A Specialist

Feb 15, 2008
In order to save a great deal of time and possible money when looking for a property development mortgage, go with a specialist website. This is the quickest way to not only get access to the cheapest rates of interest for the loan but also provides you with all the information you need when it comes to deciding which deal to go for.

A specialist broker will listen to your needs when it comes to helping you decide which loan would be the most suitable for your circumstances. They will then be able to search with the whole of the marketplace to find the cheapest quotes and best deal based on the criteria you supply. A property development mortgage can be complicated and cannot be compared to a residential mortgage. This is due to the fact that they are entirely based on the individual and the project at hand. This means that there is no set rate of interest laid out.

The lender will take a look at what you are proposing to do with the mortgage, your experience in the property development market and the size of the development. However on saying this you can get a very rough idea of the rate of interest you could expect to pay. Lenders will usually offer a rate that is between 1.5% and 2.5% above the base rate which is set out by the Bank of England. While a broker can search with some of the best lenders in the UK market, very often by just taking a look at your proposal they will have a good idea which lenders to approach on your behalf.

The majority of projects that rely on being approved for a property development mortgage run into hundreds of thousands of pounds, as such lenders will usually offer the mortgage on an interest only basis. The interest only mortgage means you borrow the total amount required for the project over a certain period of time which can extend perhaps to 30 years. The monthly repayments that are made however are only taken off the interest that the borrowing accumulates. While the monthly repayments on an interest only mortgage are smaller than those of a repayment mortgage this means you will have to find the capitol and repay it upon completion of the loan.

Depending on the experience you have when it comes to property developing it can be hard to raise 100% of the finances needed. As a very rough guide the majority of property developers are able to borrow between 70% and 75% of the costs for building and the purchase price. This means that you would have to be able to show you have got the funds in place to cover the shortfall. By working with a broker from start to finish and in particular when in comes to putting together your proposal you are able to get off to the best of starts and attract the best deal possible.

Along with finding you the cheapest and best property development mortgage a broker can secure the loan faster than the individual would be able to secure it. A specialist broker will gather together quotes for you to compare and along with these will come the key facts of the mortgage. Taking the time to read and compare the terms and conditions that come with your quotes is essential as this is where the vital facts relating to the mortgage reside.
About the Author
Sean Horton is a Director of Enhanced Wealth, a whole of market mortgage broker and IFA specialising in mortgage advice and the associated areas of income protection, mortgage protection, mortgage life cover and Property development loans .
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