What type of property finance do I require? Mike Collins Mortgage Advice


Mike Collins Mortgage, an independent financial advisor, frequently gets asked this question: How to best fund renovations or property constructions. Mike has 17 years of industry experience and this advice is for anyone who wants to start large-scale developments or buy-to -let property.

” Property financing is an umbrella term that refers to many different funding options, such as bridging loan or property development loans ,” said he.

You have a variety of funding options for residential, commercial, and mixed-use projects.

Mike Collins gives advice on funding your property projects.

Determine which financing options are best suited for your project

Many times, financing is required when property developers and house buyers are looking to renovate their homes. This can be a short-term, high-interest loan.

But, it is important to keep in mind that eligibility criteria are subject to change and can depend on the quality of your business plan or your personal credit score.

Bridging loans

This loan is a short-term option to quickly get cash. This loan may be helpful if you don’t want to sell your home but still need cash. Maybe you need money right away to buy a property that is being sold at auction.

A bridge loan can be used to finance a lighter remodel of your existing property, such as decorating, plastering, or installing a boiler.

This option is great if you need money quickly. Money can be available in as little as 3 days. While interest rates may be higher than other financial products, they can still be affordable because they are shorter-term.

A bridging loan is a credit that you receive for a short period of time until your property sells. You have the funds to repay the amount.

Development loans for property

A property loan for development is usually paid in phases over a larger project. It is often paid out in smaller chunks such as this:

  • The first payment is often the purchase of a new development site. This could pay for land to build a number of new properties or finance an existing property that requires refurbishment.
  • The second loan portion is used for building costs. The loan can be distributed as planned (known as staged drawing down).

The loan is agreed upon at the outset. It can be repaid by mortgage financing or through the sale of the home.

Mortgage for buy-to-let

You can apply for a mortgage if you are looking to buy a house then rent it. You should carefully review the terms of subletting or letting.

Lenders might ask for a 25% to 40% deposit, but this is different from a residential mortgage. There may be higher fees. Some mortgages are interest only.

Personal loan

This finance, also called an unsecured loan is not secured against any property or assets. These loans are fast credit options that allow you to buy large assets like a property.

You have the option to make fixed repayments. Your best bet is to pay off the loan in its entirety by the end.


It is easiest to finance property development with cash. As you can avoid paying high interest rates and loans, cash is always a good option. Avoid debt by putting as much money as possible in cash and as deposits.

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