An HMO (House in Multiple Occupation) mortgage is a type of buy to let mortgage specifically designed for properties that are classified as HMOs.
HMO mortgages can be in your personal or limited company name depending on your preference or tax situation.
HMOs are properties that are rented out to multiple tenants who aren’t from the same household, usually sharing facilities like bathrooms and kitchens. HMO properties will have multiple tenancy agreements in place as opposed to single one with a traditional buy to let property.
Lots of rules and regulation surrounds the HMO property buy to let market detailing who can live in them and the way they operate.
HMO mortgages are classified as higher risk lending compared with standard buy to let mortgages to lenders due to the higher renovation and legal costs involved and the availability of HMO letting agents. Often, HMOs are managed by the buy-to-let landlords themselves.
The Financial Conduct Authority does not regulate some types of buy to let or commercial mortgages.
Get StartedThe subject of HMO mortgage advice therefore, having an expert buy to let HMO mortgage advisor on your side throughout the whole process will prove invaluable.
Apply NowThe HMO mortgage market is complicated and can be a minefield without an experienced buy to let mortgage broker by your side.
Lending criteria is vast and there will be hurdles to overcome along the HMO mortgage application process.
Here, we have a specialist buy to let group of mortgage advisors that have vast experience and knowledge within the HMO area. We have many returning landlords who we help with all their lending needs, including their buy to let remortgages and bridging finance.
As part of our free HMO mortgage consultation, we’ll understand your needs and what you are looking to achieve with your new mortgage and recommend the best way forward for your personal situation.
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Many HMO mortgages are for self-employed landlords and investors who choose to either buy in their personal names or via a limited company buy to let.
Just like with an employed applicant, with self employed mortgage advice you’ll have to evidence earnings in the same way along with the income and potential income from your investments.
Given the complexity and specific nature of HMO properties, mortgages for such properties cater to the unique challenges and opportunities presented by this type of rental investment.
Buy to let landlords interested in HMO mortgages should carefully consider these aspects and ensure they meet the criteria set by lenders before applying for such mortgages.
This is where the help and assistance of an experienced HMO mortgage broker will prove invaluable and could save you both time and money.
A typical definition of an HMO would be a property occupied by 5 or more people, 5-7 lettable rooms and property with more than one tenancy agreement in place.
Houses that are subject to selective licencing are only classified as HMOs where at least one of the above conditions are met.
As a knowledgeable mortgage broker, we can provide the guidance and support you need to get you through the HMO mortgage journey.
No, you must take out a specific type buy to let mortgage aimed at HMO Landlords. Not all buy to let lenders will lend on HMO’s and those that do often have a specialist range of products.
It’s important to see help from a mortgage broker to help save you time and money.
If you are looking to let out your current property to buy a new one, this is called a let to buy mortgage.
The minimum deposit varies from lender to lender, but it would be no less than 25%.
The amount of deposit you will be determined by the value of the property and how much rental income you are going to receive from your investment.
HMO properties also have a higher refurbishment and upkeep cost than a regular buy to let due to the increases rules and regulations surrounding them.
Like any other buy to let application, your new HMO mortgage lender will instruct a local independent valuer to confirm the property’s value and provide an indication of how much income you are going to receive from the property to gauge if the Investment is worthwhile.
For the right investors, yes! Others, no! You need a lot of money to get started and to fund the upkeep, maintenance, and legal costs.
Often, HMOs are purchased by professional landlords, those that are used to dealing with the regulation and know what they are doing.
For first time buyer buy to let landlords you’d struggle getting an application approved as you’ll need to evidence that you have experience in this area of investment.
To many, becoming a landlord for an HMO property means great reward, as multiple incomes can often contribute to a higher profit margin than if you were receiving rent from a single party, such as a family.
The downsides are that these mortgages tend to be more expensive and often entail signing on students or non-professionals as tenants, meaning income may be seasonal and inconsistent.
Although a stereotype that doesn’t encompass everybody, student tenants are regularly known to leave the property in a less favourable state, requiring further expendable income for repairs.
With the knowledge being a mortgage broker, we can answer any questions you may have keeping the technical jargon to a minimum.
We have dealt with lots of HMO mortgages before so we can provide the guidance and support you need throughout the HMO mortgage.
Yes, just like with a traditional mortgage you’ll be able to remortgage a HMO property and have options such as taking a product transfer with your current lender, a remortgage to a new lender and capital raising to release money.
Also, alternative products are available if you are looking to release money such as a secured loan, further advance, or bridging finance, what we’ll recommend will depend on any early redemption charges on your existing deal and what you are looking to achieve with the new money.
As part of the HMO buy to let remortgage advice process, your experienced mortgage broker will advise you accordingly with the best product.
We're available to speak to at times that better suit you and your schedule.
We don't ask for any payments upfront, we're only paid on mortgage success.
There will be a familiar face through every step of your HMO Mortgage application.
HMO Mortgages can be quite tricky to work with. We'll help you navigate the mortgage process.
Our team will recommend the most suitable insurance for your personal and financial circumstances should you become ill and unable to work.
We'll take a look at our panel to find the best mortgage deal for you, with favourable rates.
We've come across all kinds of mortgage scenarios over the years. We'll use the knowledge we've gained over the years to help you with your HMO Mortgage.
Our team will help overcome any hurdles you face along the way, like issues with property surveys and down valuations.
Understanding these pros and cons is crucial for landlords considering HMO mortgages. It’s important to weigh these factors against individual circumstances and your property investment goals before proceeding with this type of investment.
As always, speaking with a HMO mortgage broker alongside a reputable account is recommended so you are receiving complete advice in this area.
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