Posted on 24 February 2013 by M DAVIDSON
I want to buy a plot of land and have a workshop built to occupy my business. I have identified potential plots. I could fund approx. 50% of the total land and build costs from savings, or purchase the land outright plus part of the build cost. Banks want to charge ridiculous interest rates during the build before converting any loan into a commercial mortgage. Can I get a mortgage/loan at reasonable interest rate on drawdown as the building is built. I don't want to use my own house as security. I could get a mortgage/loan on an existing industrial building but prefer to have my own built.
Unfortunately the rates being charged by lenders esepecially the banks, for development finance are higher than those of the mainstream residential lenders. If you have the equity in your main residence and the income to support the loan, then that would be the cheapest way to fund the build, and then once completed we could look to do a remortgage on the new workshop onto a normal commercial loan.
Some of the smaller lenders that we have strong relationships with, will be cheaper than the banks for this kind of finance, and may be worth exploring as you don't want to use your main residence as security.
If you'd like to see if there's any cheaper options than the banks, then please let me know and I'll arrange a convenient time for you to talk to one of our consultants.
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