Transform Your Property’s Value: How Property Refurbishment Loans Can Help You Finance Your Renovation Project
Property refurbishment loans are a type of loan that allows individuals to borrow money to renovate or improve a property that they own or wish to purchase. These loans are specifically designed to cover the cost of the renovation work and they are typically secured against the property being renovated.
Example of a Refurb Loan
Let’s assume that the borrower owns a property in Handbridge, Chester that is currently valued at £250,000, but they want to make some improvements that will increase its value to £300,000. The refurbishment costs are estimated at £15,000.
To obtain a property refurbishment loan, the borrower will need to provide us (the bridging lender) with a detailed plan of the renovation work that they wish to undertake, along with a budget and timeline for completing the work. We will assess the proposal and decide whether to approve the loan based on the borrower’s creditworthiness, the value of the property and the projected increase in its value after the renovation work is completed, also known as the Gross Development Value (GDV). Here at Breeze Capital, our property refurbishment loans mean we can lend up to 80% of the property value meaning the borrower needs to put in less cash than usual.
If the loan is approved, the borrower will receive the funds needed to cover the renovation costs. We will release the loan amount in stages, with each stage being released once a certain portion of the work has been completed and verified by a Monitoring Surveyor or Quantity Surveyor. This helps to ensure that the funds are being used as intended and that the work is progressing according to plan.
Once the renovation work is completed, the property will be revalued to reflect its increased value. In this case, the property’s value is expected to increase from £250,000 to £300,000. The borrower will then need to repay the loan, along with any interest and fees, based on the new, higher value of the property.
Summary
Property refurbishment loans are a type of loan that enables individuals to renovate or improve a property that they own or wish to purchase. The loan is secured against the property and is based on the expected increase in value after the renovation work is completed. In our example, the borrower would receive £15,000 to complete the renovations, and they would need to repay the loan based on the property’s new value of £300,000.
Call us on 01244 565095 to find out more or to apply for a heavy refurbishment bridging loan.
