There is no denying that as a property developer, you can face several unanticipated problems with your various projects. It is easy to assume that only these issues are unique to projects with poor planning and management, but the reality is they can pop up in all kinds of property development projects, no matter how precise the planning.
For instance, you can experience construction project delays due to bad weather or an important supplier not delivering as expected. Similarly, your preferred construction crew for the job can be overbooked when you are ready to build, causing you to lengthen timelines. However, the pandemic and Brexit are also contributors for recent delays in construction projects across the UK.
Sadly, any property development delays can result in hefty late fees if you used borrowed developer finance to bring the project to life. Luckily, development exit finance is an option to consider to avoid paying increased fees. Below are some tips worth knowing to ensure efficient property development refinancing.
When Is Refinancing An Alternative Worth Considering?
It is vital to understand that you have several alternatives to consider for property development refinancing as a developer. Always carefully examine the options you can select to decide whether refinancing your project is the best course of action to take in the first place. You should also consider your project’s terms and conditions and whether you will pay any extra costs if you refinance, even if doing this can cause a net loss. Furthermore, consider your realistic chances of paying what you owe fully and timely and whether you can exploit any opportunities for adjustment.
Prolonging Your Terms
A one-year loan term is expected with this type of financing. This short term can lead to delayed construction or closing. It is advisable to obtain development refinancing commitment through a reliable broker like Finbri or by yourself. Find a company that charges zero penalties or fees for finishing your project earlier than anticipated.
Bringing Down Costs
Property development funding typically has lower interest rates compared to consumer loans. Therefore, you can save significant cash on the cost of borrowing when undertaking construction projects. Additionally, all interest accumulated on your loan exit is kept, so you can invest your entire resources in completing the building project.
Should You Refinance Now?
You can avoid hefty penalties for delayed projects if you choose to refinance. In addition, refinancing can offer you the necessary funding needed to kickstart your next project. Developers seeking economical ways to fund their venture often use refinancing to acquire sites, design, and start planning despite handling projects. As such, refinancing is an option you can also consider when starting your new project.