HMO Mortgages
Looking to secure a HMO mortgage? Kingsbridge Specialist Finance can help.
Houses in Multiple Occupation are a popular buy to let model due to the usually excellent cash flow, but they come with unique financing requirements. As HMO landlords ourselves we understand the intricacies of financing HMO properties and can guide you through the pitfalls to the right lender that will offer the best value for your circumstances.
What is a HMO mortgage?
If you’re letting a property to three or more unrelated people, in more than one “household”, that’s a HMO! Lenders view this type of buy to let as higher risk and offer specific products to meet this market. Typically, these products will be more expensive than standard buy to let products.
What are some of the unique challenges with HMO mortgages?
Lenders are well aware of the many requirements on landlords that operate in this space, and they will want to ensure that you’ve met all of your licensing, planning and H&S requirements.
Valuations! Spend 5 minutes on a HMO Facebook group and you’ll find somebody asking about how to achieve an investment valuation on their HMO.
These involve the valuer using the yield from passing rent as their main point of reference when calculating a value. Instead of a “bricks & mortar”, comparable sales evidence method and can often lead to higher potential loan amounts.
Given that valuations can often run into thousands of pounds, the key is knowing how each lender is likely to instruct the valuer.
HMO Mortgage rates will often be higher than residential mortgage rates so it’s crucial to get the right advice to ensure you don’t pay more than you have to.
If you’d like to help finding the right HMO lender for you, fill in your details below and we’ll call you back.
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Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.
Some forms of Buy to Let mortgages are not regulated by the Financial Conduct Authority.
Thank you very much James (speak again in a couple of years 😅)
