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articles > HMO Funding!
Article > HMO Funding - Is It Out There?

www.isbuytoletmortgages.co.uk
Investment Solutions, 23 Market Square, Sheffield,Yorkshire S13 7JX
08456180420
Article kindly supplied by Ian Flemming
Investment Solutions are mortgage brokers who are different from the rest. We can find you a mortgage to fit your needs, no problem - and we will do this efficiently and as quickly as is possible! The real strength however lies in the fact that we will look at all aspects of your property portfolio and your investment strategy. Investment Solutions offers a one stop shop for property investors. Staffed by property investors we have the knowledge to help you succeed.
 

In this day and age getting HMO funding can be a problem, the reason for this is that the traditional funders, in general are not taking on any new business and the high street banks are shying away from this type of commercial deal.

We at Investment Solutions have been working hard to get a funder that will look at HMO lending and feel that we have come up with a number of solutions to help our clients that want to purchase or refinance away from their current lenders.

There are still lenders within the buy to let mortgage market that will look at houses of multi let, however their criteria is strict and the maximum number of rooms they will do is 6. The property must not be licensed as an HMO. It will be down to your local authority to determine if the property needs to be licensed or not. The lender would also expect the property to be let out already to show an income coming from it. This lender will not deal with individuals that have their main income from property. They will only allow 25% of income coming from property.

On a commercial basis, the mortgage lenders would look favourably at HMO’s, but generally only when you are looking to place a portfolio with them. As an example if you had 3 standard buy to let properties and a large HMO, they would look to re-finance all these onto a commercial portfolio product. As this is a commercial deal the rental yield is all important here. If your portfolio, with the HMO is generating a yield of 7%+ then there could be a product available at 70% Loan to value. Please remember that commercial deals all stand on their own merit and rates will be determined on a case by case basis. Most commercial lender will also insist on the repayment vehicle being capital repayments.

We also have a Bank that have an appetite for lending on HMO’s on a part commercial, part buy to let basis. This means that they use a rental multiplier to determine the maximum lending. As an example if you take the monthly rental and multiply it by 123 it will give you the maximum borrowing up to 70% of the market value. At this time the lender would want you to use a capital repayment vehicle if you wish to borrow 70%. There are options for interest only initial periods if the borrowing is less than 70%.

Why not talk to Ian about your mortgage requirements. Contact him now.


www.isbuytoletmortgages.co.uk

Investment Solutions, 23 Market Square, Sheffield,Yorkshire S13 7JX
08456180420

 
 

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