Property developers can encounter several challenges that can hinder their projects in various ways. Even the well-planned and managed projects can experience issues. Therefore, you need a great backup plan as a property developer just in case your project experiences any challenges.
Many developers have their projects delayed for various reasons, like bad weather or a supplier not delivering on time. Additionally, preferred construction professionals can be unavailable when building time draws close. However, the combined effects of the pandemic and Brexit are largely to blame for the widespread construction delays in the UK currently.
These delays can cost you a lot of money since you may have to pay huge fines if your project is funded with development finance. Luckily, development exit finance is a reliable solution you can leverage to avoid huge penalties. This guide will explain successful property development refinancing in detail.
The Best Time To Refinance
Property developers are hardly short of options to consider if they choose to refinance their building projects. As such, it is prudent to carefully consider all your alternatives before deciding whether refinancing is best for your needs. Additionally, think about your project’s terms and conditions and the possibility of further costs if you refinance, even if this may cause a net loss. Also, consider whether you can make full and timely payments and if you can take advantage of any adjustments.
According to experts, refinancing is worth considering after nine months of working on a project. This recommendation is because nine months is enough time to be sure about whether you can meet your deadlines, as a lot of your work should have been finished by then. You can consider development finance alternatives if you don’t think you can meet your deadlines, just like other developers do.
Prolonging Your Terms
You will likely receive a one-year loan term if you choose this type of financing. However, this short term can cause setbacks on your timetable, especially if there are issues with construction or closing. Therefore, it is advisable to obtain a property refinance commitment through a trusted broker. Additionally, choose a company that will not penalise you with fees if you finish building earlier than expected.
Cutting Down Costs
Property development funding alternatives usually have less interest rates than consumer loans. Consequently, property developers can save on the cost of borrowing when executing building projects. Additionally, the interest that builds up on your loan exit is kept, enabling you to invest all your resources in completing the project.
Should You Refinance Now?
You should undoubtedly consider refinancing as a property developer because it helps you avoid fines for delayed projects. Also, it offers the necessary cash you need to begin your next construction project. Refinancing is used by other developers seeking low-cost ways to fund their operations to acquire new sites, design, and start planning while still undertaking a project. Therefore, refinancing is an option you can also turn to when you are ready to start your next project.