hmo finance terms and conditions

hmo finance team





When assessing the worth of your HMO, lenders may consider the rental income. This is especially advantageous if you intend to withdraw equity from the property.

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A large deposit is required for an HMO mortgage. LTV ratios between 60% and 75% are required by most lenders (i.e. Minimum 25% deposit While lenders may consider potential rental income in their stress test calculations, they will usually base their sums based on the rental income that you would get from renting the property to one household and not individuals. The mortgage must be affordable to you, and have large margins. A mortgage broker can help you determine how large an HMO mortgage mortgage you can afford according to your lender.

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HMO mortgage lenders have additional requirements for the property. Some mortgage lenders have specific requirements about the property. For example, they may require that only one kitchen be available to tenants or that tenants share common seating. Others limit the number and height of bedrooms and storeys. Find a lender that will allow you to renovate your property before you lease it. A mortgage broker is able to assist you in navigating all the restrictions and conditions necessary to find a lender willing to lend.

hmo finance zone
hmo mortgage limited company

hmo mortgage limited company


HMOs can be more complicated to manage than traditional buy to rent models. HMOs often have shared facilities, which can lead to tenants falling out. In addition to being a landlord you might also find yourself as a mediator between tenants that don't agree.

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HMOs require a five-year licence from the local municipality where the property is found. It is vital to speak with the relevant authority regarding the policy in your particular area. There are some exceptions to the rule. Licences can be required for smaller properties or properties with fewer occupants. The area will affect the application process so make sure you have all the necessary information.

hmo finance uk

hmo finance uk


HMO mortgages are only available to experienced landlords. This means that lenders may not accept applications from those who have been landlords for more than two years and/or have experience with HMO letting. There may be additional requirements from lenders. Lenders may have additional requirements if you are a first landlord.

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HMO landlords are likely to pay utility bills for their property, unless it was converted into flats or had separate title deeds through the land registry.