What is a refurbishment loan?
A refurbishment loan is used to make improvements to a property you intend to rent out or sell rather than live in. These renovations can be anything from cosmetic changes up to major structural alterations that typically require planning permission. This type of loan is suitable for developers, landlords and property investors.
Refurbishment loans are suitable for house flipping. This is when you purchase and renovate a property in order to sell for a profit. The profit will more than cover the amount of the loan, but you need the funds to be able to do the work before you can benefit from it. It’s important to understand the risks if the property doesn’t increase in value, including if you fail to repay the loan.