Property development can be a very complicated process. You can face many difficulties mid-project as a developer, even if you plan thoroughly and manage well from the onset. As such, property developers need reliable backup plans to fall on in case something goes wrong with their projects.
Construction project delays in the UK can be due to several factors, such as your preferred construction professionals being unavailable when you are ready to build, or material unavailability. Your project can also delay if trusted suppliers don’t deliver on time or the weather is too poor to permit progress. However, many construction delays in recent times can be attributed to the combined effects of the coronavirus and Brexit. Selecting the best materials, such as scaffold cantilever, is a key stage in the project development.
These delays are very inconvenient, but they can also be costly since you may have to pay huge penalties if your project is funded by development finance. Fortunately, you can opt for a bridge loan refinance to avoid hefty fines. Here are some insights worth knowing for successful property development refinancing
When to Refinance
You have some options to consider as a property developer if you decide on refinancing your project. Therefore, it is best to consider all available options before deciding whether refinancing is the ideal thing to do. Also, consider your present project’s terms and conditions and the possibility of extra costs if you refinance, even if this can cause a net loss. Furthermore, consider whether you can pay what you owe fully and timely and the likelihood of adjustments.
Refinancing is undoubtedly an option to consider if you have worked on your projects for nine months. This period is enough to be sure about your chances of meeting your deadlines since a lot of the work would have been done by then. Several property developers will consider development finance alternatives if they are unsure about meeting their deadlines, so you should too.
Stretching Out Your Terms
Generally, a loan term of one year is expected if you opt for this form of financing since this is the standard term many other borrowers receive. However, timetable delays can easily arise due to this short-term, particularly if there are problems during building or closing. As such, it is best to obtain a property refinance commitment through a broker like Finbri or by yourself. Also, always pick a company that will not penalise you if you finish your projects before the expected time.
Bringing Down Costs
Consumer loans carry higher interest rates compared to property development funding options. As such, developers can save big on the cost of borrowing when undertaking building projects. In addition, the interest that builds up on your loan exit is kept, so you can easily invest all your resources in finishing your project.
Is This the Right Time for Refinancing?
Refinancing is worth considering as a property developer because it helps you escape penalties for project delays. Additionally, it can give you the money you need to kickstart your next building project. Many property developers seeking inexpensive ways to fund their operations typically use refinancing to acquire their sites, design, and begin planning while still undertaking a project. Therefore, you can also consider refinancing immediately when you are ready to begin your next project.
