Property Finance or Refurbishment Facility - how does it differ from a normal mortgage and why would you want one?
A refurbishment facility is designed for the established residential property investor who has developed an expertise in the conversion /refurbishment of residential property but who would prefer the simplicity of having both short and long term finance provided by a lender which focuses solely on Residential Property Investment.
Refurbishment Finance is available up to a maximum level of
£500,000 per property. The lender will provide up to 70% of
the purchase price and a maximum of 70% conversion or
refurbishment costs via up to three stage payments based on
the increase in its value.
On completion of the project, the outstanding debt can be
converted into a long term mortgage of up to 85% of its end
value, subject to aggregate borrowings from the lender not
exceeding £5 million and rental cover being in accordance
with the requirements of the lender. Alternatively the property can be sold and the facility costs, capital and accrued interest plus associated fees, where appropriate, repaid.
