Frequently Asked Questions for Development Finance
What is development finance used for?
Development finance is a type of loan which can be used to improve a property or to build a new structure.
Will I have to pay exit fees if I complete my project early?
We aim to secure a funding which incurs no exit fees.
Can I still get finance with a poor credit history?
Yes, funding is secured against the property value.
Will I have to make monthly payments?
No, the interest is rolled up throughout the agreed term of the loan.
Will I be charged interest on the full term of the loan even if I complete the project early?
You are only charged interest for the amount of time you take out the loan.
Do you take into account the profitability of my business when securing a loan?
No, the loan is secured against bricks and mortar only i.e. the value of the property if it is empty.
Do you provide loans on particular property types?
No. We lend on residential, semi-commercial and commercial properties and land regardless of the construction, type or use.
How quickly can a loan be secured?
Usually within a few days of receiving all documentation.
What additional documentation would I need to provide?
A feasibility study of your development would be required.
At what point can I move from a development finance loan to a commercial mortgage?
When the development can demonstrate a profit i.e. increased value or when it can provide a revenue stream e.g. tenants rental payments.
Does self-build mean that I have to personally build the property?
No. It refers to an individual looking to build a property from the ground up and subsequently live in it.
Do I need a solicitor?
No. However, we recommend customers seek independent legal advice prior to completion.
What are drawdowns?
These are staged payments made against works carried out on the property.
What are the usual drawdown stages in a project?
Drawdowns can vary from project to project but are usually released as follows:
- Land value – an initial draw down against either the purchase cost or the value of the land (if already owned).
- Initial costs including the footings and foundations.
- Wall plate which is the basic external structure of the project.
- Wind and water tight which primarily means the windows and the roof.
- 1st fix which includes the plastering and the initial installation of the electrics.
- 2nd fix to complete the electrics and any finishing work required such as painting and decorating, landscaping etc.
Are you regulated by the Financial Conduct Authority?
The FCA do not regulate all mortgages such as Buy to Let and Commercial. UK Property Finance Ltd is authorised by The Financial Conduct Authority (FCA) no 667602.