Understanding Refinancing with Bad Credit – A 10-Minute Guide
Understanding Refinancing with Bad Credit: A 10-Minute Guide Table of Contents Refinancing your home loan can be a powerful financial tool. It allows you to
A property development loan is designed to fund the construction of multiple properties under the same title. For developments of up to four units, funding falls under a residential property loan. For any larger development, a commercial property loan is needed.
Before you begin any development project, it’s important to establish how much you can borrow. This will save you the stress of trying to refinance later or going over your projected budget.
When looking at property development loans, it is important to understand the two different types. Knowing which loan is right for your development will save you both money and time spent lodging documents, and get you on your way to building much faster.
If you’re looking to find out if you’ll need site plans for a development loan, read on below.
Most lenders split property development into two parts, which can have very different approval processes, fees and interest rates.
• Residential- Most lenders define residential property development as a small scale development of up to four units.
• Commercial- If your property development is greater than four residential units, lenders are likely to class it as commercial property development. This can range from a series of commercial properties to an apartment complex.
Funds for residential property loans are generally released at the end of each building stage instead of in one lump sum. This is to ensure that you are continually able to pay your builder throughout the construction process. As residential developments are of a smaller scale than those of commercial, they are seen as a lower risk to the lender and thus have easier lending criteria.
Most lenders will at least need to see a detailed building plan before approval, which can be put together by a qualified firm. This should include:
• The funds you have to put towards the project
• Any contingency funds you have access to in case of any unexpected expenses
• Your builder’s experience and qualifications
• Location and zoning information of your property
• A detailed property description
• A timeline for construction, from beginning date to finish date
• The total estimated cost of the project
Depending on your lender, you may also need to provide a full site plan as well as the building plan if you choose to apply for a residential development loan.
It’s best to check with your lender and see what they will require from you before you start an application.
Generally, in the case of a commercial development loan, your lender will need to see site plans as part of the application process. It’s always a good idea to check with your lender to find out what they specifically require, but in most cases, detailed site plans will be necessary in order to approve your loan.
One of the main things to consider when obtaining a development loan is whether you will need a residential or commercial development loan. The way that the funding is arranged depends on the number of properties being built on the development site. Banks tend to have a tougher approach to development loans, meaning that you’ll need to provide a range of personal details and extra documentation in addition to the lending standard criteria.
Along with the usual forms of identification, you will need to provide your financial details. Documents such as bank statements, cash flow projections and details of your assets and liabilities may be needed.
Your lender may ask for details of the property you want to purchase, such as its location, as well as a professional valuation to determine how much the property is worth.
Depending on your lender, they may ask for a wide range of other details. This depends on the size of the loan you have applied for, and the property you are purchasing.
Getting a development loan for either a residential or commercial property doesn’t have to be hard. Choosing the right broker will go a long way in making the entire process easier. A qualified broker will be able to present you with a number of loans from their partnered lender, and then help you with what you will need to provide throughout the application process.
With Tiger Finance, we can help to get you a loan in four easy steps. You will have a free consultation with one of our specialists, and we will tailor-make you a loan. We will negotiate with lenders on your behalf before you are approved.
We have helped countless Australians with both good and bad credit ratings to be funded for their dream build.
Our finance specialists can help you find the right development loan for your project. Development loans are a complicated topic, but we will find a loan that makes your dream project that much easier.
If you are one of the many Australians finding getting a development loan difficult, Tiger Finance can make the process simple and pain-free. Call us today to get started on your new development!
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Our vision is to make it simple and easy for every Australian to get the funding they need to achieve their big life goals.
National Home Loans Group Pty Ltd trading as Tiger Finance | ABN 57 168 971 346
Tiger Finance Credit Representative: Kiara Patricia Halley | Credit Licence: 468465
*Interest Rates: Conditions, fees and charges apply. Interest rates are subject to change and will vary. We cannot guarantee that the interest rate advertised on our website will be the one offered to you. Interest rates offered will be dependant on your situation.
*Consolidating high-interest personal loans and credit cards into a lower-interest home loan may result in significant savings on interest for some consumers. However, this solution may not be suitable or accessible to everyone.
*The approval timeframe is varied. Approval time is subject to change depending on your circumstances or loan type. Processing times may be subject to your lender.