hmo mortgage explained
It is crucial that you get the best possible deal on your financing to ensure a long-term return. Get in touch with our HMO mortgage finance specialists.
An HMO mortgage will require a large deposit. LTV ratios must be between 60% to 75% for most lenders. A minimum of 25% deposit. Lenders will consider rental income when calculating their stress tests. However, they will base their calculations on the rental income from renting the property to one household. Your mortgage should be affordable and with large margins. A mortgage broker will be able to advise you as to how much an HMO mortgage is possible for you (according to your lender).
HMO licenses are subject to different conditions by individual councils. However, you should be aware of these requirements before you apply. HMO licences can only be obtained if required by the local authority. A fine of up to PS20,000 is possible for renting an HMO licensable without a licence.
It is crucial that you get the best possible deal on your financing to ensure a long-term return. Get in touch with our HMO mortgage finance specialists.
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.
HMOs can be rented by students or young professionals who cannot afford to rent the entire property. They may also not be settled enough to move in together. A tenant can rent one room for less than an entire property. However, the total rent for all of the rooms is typically higher than what could be charged to a single household. HMOs can bring in a higher rental income for landlords.
HMO mortgage lenders will typically take rental income into consideration. This can dramatically increase the mortgage amount. HMO mortgages can offer variable and tracker rates. LTV rates are usually set at 80% LTV. Rates that offer attractive rates come with higher deposits and lower LTVs.
Are HMO mortgages different? - HMO mortgage rates tend to be higher than standard buy to let mortgage products. This is because the HMO mortgage market is less competitive in terms of the number of lenders. Lenders that are prepared to lend on an HMO will charge slightly higher fees and rates for a mortgage.