Light to Heavy refurbishment
Funding for your refurbishment project, any size from minor works to redecorate and add a kitchen or bathroom to major extensions or conversions.
Refurbishment loans – bridging or mortgage lending;
As a market leading broker we work with a broad range of lenders and depending on your plan may be able to recommend a variety of products;
- Refurbishment mortgages – within certain limits its possible to complete the property refurbishment within the term mortgage to save refinance costs later on, this will be applicable where the refurbishment cost is a small percentage of the purchase price of the property.
- Refurbishment bridging loans – the more typical route for most projects is to bridge the purchase and depending on the refurbishment cost self fund that or borrow further from the bridging lender as work is completed. The loan is then repaid by either selling the property (a flip) or by remortgaging onto a term product (commercial investment mortgage, buy to let mortgage, commercial mortgage or residential mortgage)
- Bridge to term loans – working with the same lender for the initial bridge and refurbishment, the advantage here is that you’re 100% approved for the bridge exit from day one and that the refinance costs will therefore be lower, the disadvantage is being tied into that lender’s products which might not be the most competitive in the market.
Heavy Refurbishment loans
Lenders have differing criteria for the assessment of what is a heavy or light refurbishment.
Typically a heavy refurbishment would be;
- Works requiring planning permission or change of use.
- Structural alterations
- Budgets for works more than a certain percentage of the initial property value of around 25%
Light refurbishment loans
If less work is required, it’s not of a structural nature and doesn’t require planning permission to be completed then a light refurbishment loan will be the answer;
- Borrow up to 90% of purchase price.
- Rates from 0.65% per month.
- Completion within 7 days of a submitted application where necessary.
- First time investors applicable.
It’s any form of loan (normally a bridging loan) allowing renovation or refurbishment of the security property.
Yes – you can borrow up to 90% of the purchase price of the property due to be refurbished, find out more here!
– Assess and price the work required & time it will take
– Estimate the finished value of the property using Rightmove and Zoopla & the anticipated rent if you’re going to retain and rent it out.
– Decide who will do what, what are your skills and will you need professional help?
We’ll then take that information and put you together with the best lender for your job!
The important thing is to be realistic and understand exactly what you’re doing!
Typically where a property only needs to be redecorated and minimal other works (maybe an upgraded kitchen or bathroom) this can be done within a mortgage rather than using a specific refurbishment bridging loan.
That’s always going to be difficult so check out the page above and understand the borrowing options.
To get started on a budget try Freecycle, Freegle, Gumtree and Facebook Marketplace for free paint and materials, many areas have paint recycling centres and charity shops can help keep within a budget.
For free labour (yes you did read that right!) try Workaway volunteers will work for you in exchange for board and lodge.