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Navigating Heavy Refurbishment Loans: A Comprehensive Guide

Refurbishment Loans

Refurbishment loans are used to provide finance for property developers and investors who want to improve or enhance properties they already own. They can also be used by landlords looking to improve their buy-to-let portfolio, or commercial property owners seeking to maximise the value of their asset.

The type of heavy refurbishment loans required will depend on the scope of work that is planned. This can vary from light refurbishment to heavy refurbishment and is typically defined by whether the work undertaken requires planning permission or a change of use. Light refurbishment bridging loans are available for works that do not require planning permission or building regulation checks, whereas heavy refurbishment bridging loans are more complex and will need to have the approval of the lender’s valuer.

Refurbishment finance is one of the most popular forms of bridging finance, and is often used to fund minor to major upgrades for properties that are listed for sale or in need of urgent repair. This can include bringing properties up to code, or to a better standard for rental purposes.

If you are seeking to fund a major renovation or refurbishment, it is important that you take the time to carefully consider all aspects of the work and how it will be carried out. This will help you ensure that the project is feasible and can be completed within the desired timeframe.

There are a variety of lenders who can offer property refurbishment loans, some with specialist expertise in this area. A reputable lender will be able to provide advice and guidance to help you find the best finance solution for your needs.

You can obtain refurbishment bridging loans to fund a wide range of residential, commercial and semi-commercial property improvements. This can be anything from refurbishing a hotel to refurbishing a doctor’s surgery. A reputable lender will be able offer funding up to 75% LTV on the initial purchase price and then release further funds as necessary to cover the improvement costs.

The lender will assess your refurbishment bridging loan application by reviewing your experience of property improvement projects, credit history and financial position. They will also look at your proposed exit strategy (sale of the property or refinance through a mortgage) and undertake some due diligence on the contractors you are using to carry out the refurbishment works.

Property refurbishment loans are a great option for both experienced property developers and first time property investors who are looking to renovate a property for sale or for a buy-to-let investment. However, it’s important to remember that you will need a solid plan for how you are going to repay the debt and an exit strategy for the property if you are unable to secure financing at the required rate. This is particularly true for heavy refurbishment projects and any work that will result in a change of use from commercial to residential or family/HMO.