HoUSE OF MULTIPLE OCCUPATION MORTGAGES
Simply Mortgages are a specialist buy to let mortgage broker, we can help you maximise your return on investment with HMO mortgages from the whole of the market.
A House of Multiple Occupation (HMO) mortgage is a mortgage secured on a property that has shared facilities including multiple kitchens and you rent the bedrooms individually to tenants. You can rent the property to individuals, to a company to house workers. A HMO mortgage on the rental income the property will achieve and can also be based on your own personal income situation.
You can typically purchase a buy to let property with a minimum deposit of 20% of the purchase price. You can choose to either just pay the interest that is charged which is known as interest only, alternatively you can opt to pay the loan balance as well and this is known as a capital repayment.
It is important to understand that there are different requirements for HMO mortgage lenders that will lend on smaller unlicensed HMO’s and those that will lend on larger licensed HMO’s.
A smaller HMO will have the planning use C3 which means that the property can also be sold and used a person’s main residence. A licensed HMO requires a change in planning to C4 use. A typical example would be purpose built student accommodation.
A smaller HMO is also known as a multi let property. The tenants may be young professionals or students but the property will not require a specific HMO license.
The lender will lend based on their risk and will consider their situation in the event of the property being repossessed. A property that has C3 use will arguably be easier to sell as it can be purchased by a larger group of people including purchased by investors as well as owner occupiers.
Using Simply Mortgages gives you access to high street banks, building societies, private banks and specialist buy to let lenders. Our aim is to provide you with expert buy to let strategy and advice. We will ensure we save you both time and money and put you in prime position to start your property investment journey.
Most banks, building societies and specialist lenders will require you to be a homeowner before allowing you to apply for a HMO buy to let mortgage. However, we work with lenders who will allow first time buyers, first time landlords and those with less experience of letting out a property to obtain buy to let finance.
To discuss your requirements in more detail, use the link below.