What is a HMO? A house in multiple occupation (HMO), is any property that is shared with three or more people. You don't need to be a licensed landlord to manage a standard HMO with less than four occupants. There are specific mortgage requirements for HMOs, however, that differ from buy-to�let mortgages for whole property tenancies.
HMO mortgages can only be obtained by experienced landlords. Some lenders won't accept applications from landlords who have been in the business for at least two years and have had experience in HMO letting. These may be additional requirements for lenders. If you are a first-time landlord, it will be difficult to get an HMO mortgage approval. You will likely need to let a single family's property.
HMO mortgage rates tend be higher than buy to let mortgages. HMO mortgage rates tend to be higher than standard buy-to-let mortgage products due to the lower competition among lenders. HMO-friendly lenders will typically charge slightly higher mortgage rates and fees than those who are not willing to lend on the HMO. An HMO should have sufficient income to cover the mortgage, utility bills, and maintenance.
HMO mortgages are only available to experienced landlords. This means that lenders may not accept applications from those who have been landlords for more than two years and/or have experience with HMO letting. There may be additional requirements from lenders. Lenders may have additional requirements if you are a first landlord.
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.
Can you get a business loan for a HMO? - Financing a Commercial HMO It this can limit the amount a landlord can borrow, because HMOs have a higher value than non-HMOs.
An HMO, as many call it, is actually a large HMO. It is a rental property where five or more tenants share the bathroom, kitchen, and toilet facilities. A building may also have a number of stories. A HMO licence is required by landlords to operate Large HMOs. It will be valid for five-years and is sometimes called Licsenced HMOs.