Property Refurbishment

Person painting their property and doing property refurbishment.

What is a Property Refurbishment ?

How does it work?

  • The loan is secured by property, normally the property that the work is happening on, but if this is already mortgaged then another suitable property may be considered.
  • In theory you can borrow up to 75% of the property value but unless the works are very significant, 30-40% loan to value should be plenty, and the lenders will want to know how you are spending the money.
  • The exit from the loan will be from either the sale or refinance of the property – refinance means taking out a mortgage on the property such as a buy-to-let loan or commercial mortgage, we can source this for you.

Light Refurbishment Loans

Group of construction working working on a property refurbishment project.
Workers discussing a project on screen.

Heavy Refurbishment Loans

Costs

  • Arrangement fees between 1-2%.
  • Interest from 0.55% per month.
  • Legal fees.
  • Valuation fees.
  • Some, not all, lenders charge an exit fee at the end of the loan this.

Considerations

  • For larger advances you’ll need to provide a build schedule which details the planned works, timescales and costings and the lender will want to ensure that the contractor has the experience to get the job done on budget and on time.
  • You will need a planned exit, this could be sale but if you need to find a buy-to-let post works we can help you with this – this will be based on a new value which acknowledges the works undertaken.
  • Most people find work always takes longer and costs more than anticipated, it could be worth borrowing what you require plus a 10% contingency.

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