What terms do developers borrow on?? I assume there is a “short-term” loan? As I imagine developers would want to pay banks out as quickly as possible if their strategy is build & sell. That being the case, what length of time should you tell the bank you want the money for? 6months? 12months? More? Or is it better to apply for loan as a long term loan?? And is there a way to make sure I do not incur an early re-payment fee if bank is repaid before end of loan term?
HappyHomes | HappyHomes
Email MeMost developers including myself would borrow on Commercial development rates which are negotiated between you and your lender.
The rate and upfront fee is something that reduces after time and when you have proved to the lender you can successfully complete a project or two.
Just bear in mind that most lenders have wised up to borrowers trying to complete residential development projects by using variable rate residential terms loans. You will find the majority of lenders have early repayment penalties or deferred establishment fees or call them what you will on their standard variable rate products.
It is like anything you might get away with it as a one off deal but for longevity it is better to ensure that you structure it properly.
Richard Taylor
Residential & Commercial Finance Broker
**NODOC loans from 7.14%**
Licensed Financial Planner
http://www.yourstatefinance.com
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Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
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