HMOs are a popular choice for individual tenants because they are usually affordable and fully furnished with bills. This is particularly true for overseas workers, students and contractors who are working visas. HMOs offer the convenience of moving in quickly and at little expense.
HMO Finance Rates The lender will determine the exact interest rate you pay and how willing they are to take into account your specific circumstances, such as your experience, the number and location of the bedrooms.
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.
What type of returns can I expect to receive from an HMO
Buy-to-let mortgages can be cheaper in terms rate and fees than traditional loans and are offered by more lenders. These mortgages are also easier to obtain because the criteria for approval is not as strict. The additional profits that an HMO can make often offset additional mortgage costs.
HMO lenders are going to be looking at the knock-on effect of higher risks on your ability and ability to pay the mortgage.
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.