What is an HMO-mortgage? HMO mortgages can be used by landlords to rent their property to more tenants than one household. These specialist buy to let mortgages offer some key distinctions.
Although every case is different, HMO mortgage applications generally take the same amount of time to process by lenders as other buy-to-let mortgages. We would estimate that a purchase mortgage offer takes three to four weeks and completion takes four to six weeks.
A House in Multiple Occupation could be more profitable than traditional buy and let. With low interest rates landlords can maximise rental yields because of the high demand for rental properties in the UK. A mortgage that is right for you will ensure your rental income makes the most of your profits.
Why should you invest in HMOs HMOs (Houses In Multiple Occupation), are typically more profitable that standard rental properties. But what exactly are HMOs and how easy it is to finance them. A House of Multiple Occupation or HMO is defined as a property where more than one person lives in the same bathroom or kitchen. A specific HMO licence is required by the local authority for properties to operate in compliance with regulations. These homes, often called house-shares, offer students and young professionals a more affordable option than small flats or studios. The HMO provides landlords and property owners with a better rental yield than letting a single unit.
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.
Landlords have two options for managing their HMO property: a single, joint and severally liable agreement or an individual contract per tenant.
HMO mortgage lenders will also need to know details about the property. Some HMO mortgage lenders may have restrictions about how the property is built. It is important to get a lender to approve renovations before you sell the property. A mortgage broker can assist you with navigating these different restrictions and conditions so you can find a willing lender.