As a developer, your interest rates are substantially important!
Pay too much, and you might find that the expense eats into your profit margin. In some cases, the housing market could change during development, and so if you find yourself needing to sell at less than expected, the cost of your financing could mean you struggle to break even.
Therefore, it's essential to ensure you work with an experienced, independent broker.
We work as advocates for our clients, with access to our complete whole-of-market network of lenders, including broker-exclusives and niche development finance providers that don't deal directly with the public.
You can also look at several steps to improve your chances of being quoted highly competitive development finance rates:
- Research lenders through your broker to ensure you apply to the most suited provider and meet all of their eligibility criteria.
- Provide a higher deposit to mitigate the lender's risk and lower the Loan to Value ratio you're applying for.
- Put together a comprehensive application with full designs, plans and technical drawings to demonstrate what you're hoping to achieve.
- Deliver a clear, tangible exit strategy with supporting documentation. If you plan to sell the development to pay back the loan, that means researching sale prices for comparable properties to demonstrate why you are estimating the anticipated sale price. For remortgages, an agreement in principle is a great way to submit a solid exit strategy.
If you need any support with constructing your development finance application to help access the best borrowing rates, please give us a call, and we'll provide tailored advice to strengthen your documentation.
