You want to make a long-term investment that will yield a high return. To do this, you need to negotiate the best terms possible on your finance. For more information, contact our HMO Mortgage financing specialists.
HMO mortgage lenders will have specific requirements regarding the property. Some lenders will require that the property has only one kitchen or have communal seating for tenants. Others may limit the number of bedrooms and floors. You will need to find a lender if you plan to renovate the property prior to letting it out. A mortgage broker will help you navigate these restrictions and conditions in order to find a lender who is willing.
A House in Multiple Occupation, also known as HMO, is a property rented to more than one tenant. In this case, the tenants share some of the rooms with each other, such as a bathroom or kitchen. The kitchen, bathroom, lounge and living room. People use the terms "flat share" or "house share" to refer to an HMO.
Houses in Multiple Occupation can yield more than regular buy to lets investments. HMO mortgages have also been more common among landlords. But, does it really make sense to apply for an HMO loan? Can a traditional purchase-to-let mortgage suffice?
A single agreement can be used by landlords to manage HMO properties. Or, each tenant can have their own contract.
HMO mortgages are currently offered by 27 lenders to individual applicants and 23 to limited businesses. HMO mortgage rates tend not to be lower than the vanilla buy to rent counterparts, as they are a special property type. Lenders have benefited from increased competition in this market, which has resulted in rates starting at 1.64% to individuals and 2.69 for limited companies.
HMOs can prove more challenging to manage than traditional buy and let models. HMOs are often shared by tenants, so it is possible for tenants to fall out. A mediator may be needed between tenants who aren't on the same page.