hmo mortgage broker uk
HMOs with no license may not qualify for an HMO mortgage. Lenders may instead consider a buy-to Ð let mortgage.
HMO properties can generate higher yields than other types of property, but they are also more difficult to set-up. HMO licences may be required for landlords, depending on the nature and purpose of the HMO.
What are the costs of obtaining an HMO licence? Costs to obtain an HMO licence vary depending on where you live. Some councils will charge according to the number bedrooms in a home, while others may charge a flat fee of between a few hundred and over a thousand pounds. Lenders are well aware of how long it takes for a license to be issued. They may accept proof that the application was made during mortgage underwriting. It is best to prepare in advance so that there are no delays at this stage.
HMOs with no license may not qualify for an HMO mortgage. Lenders may instead consider a buy-to Ð let mortgage.
HMO Buy to Let4 bedroom semi detached house with 2 receptions rooms1 reception room converted into a bedroomRents to 5 single-working professionalsMonthly renting income per tenant = PP400Monthly renting income = PP2000Annual rental revenue = PL24,000. The above example illustrates why HMO property owners are more interested in them. The difference in gross rent income can be very significant.
HMO mortgage rates are generally higher than those for standard buy-to-let mortgage products. HMO mortgage rates are higher because there is less competition in the market for HMO mortgages. HMO lenders will be more willing to lend money, but they will charge higher rates and fees. However, an HMO's income should be sufficient to pay for a mortgage, maintenance, and utility bills.
What type of returns can I expect to receive from an HMO
HMO mortgage rates are typically higher than the standard buy-to let mortgage products. HMO mortgage markets are less competitive due to fewer lenders. HMO mortgage lenders may charge slightly more for loans and higher rates than those that would be willing to lend. The income from an HMO should not be less than what is needed to cover a mortgage and utilities bills, as well as maintenance.