HMO Mortgage

Mortgages for HMO have seen a rise in popularity in recent years, however, are still difficult to obtain. Usually mortgage providers will prefer an applicant to be an experienced landlord. Often they will prefer one to three years background experience. As a first time landlord you may be accepted, although this could be at the cost of higher interest rates.

A landlord will not usually be offered an HMO mortgage directly from the lender. Lenders usually prefer to use a qualified mortgage broker with specialist HMO knowledge as an intermediary. They also sometimes require that the rental of the HMO property is managed by a letting agent, rather than the individual landlord.

It’s worth considering that lenders will require additional information from the applicant than for other mortgage types. Of course, affordability checks and credit checks and evidence of your income will be required. Additional information requirements can include any or all of the below:

• Evidence of prior landlord experience
• Whether you will be taking out the mortgage as an individual or LLC
• The location of the HMO property and how many rooms you will be letting
• Whether AST agreements are in place for each room
• What type of tenants you will accept (i.e private or local authority)
• Who will be managing the letting of the property
• An HMO licence from the local authority (if required)
• Evidence of or estimate of the total rental income expected

Contact Us to check your eligibility.