House in Multiple Occupation (HMO) explained:
HMO mortgages and lenders are available depends on the size (number of rooms), the licensing requirements and the planning permission (C4 residential or Sui generis).
On top of the type and size of HMO, the lenders and mortgage products available depends on the applicant’s experience as a landlord.
What is a House in Multiple Occupation (HMO) property? Houses in Multiple Occupation (HMOs) are properties where two or more households share a house and its facilities such as a kitchen, bathroom and toilet.
You will see in the definitions above that the main criteria are the number of tenants and the number of floors in the property.
It is important to know that although the above definitions are correct, each Council has the authority to change them. We have come across a council in the past, that requires HMO licenses for properties with as few as 3 tenants and only 2 floors.
We are experts in arranging mortgages for Houses in Multiple Occupation that require a licence. We have a choice of 7 HMO mortgage lenders that are very active in providing HMO finance.
The choice of having 7 HMO mortgage lenders allows us to arrange HMO mortgages from 3 rooms up to an unlimited number of rooms. And at least 4 of these lenders are on restricted panels, therefore only selected brokers have access to them.
The typical fees are
A bespoke illustration will be provided for your individual circumstances to provide clarity on all fees and charges prior to commencing the process. This is free of charge
Typically, HMO mortgages require a deposit ranging from 15% to 35% of the property’s value.
NOTE: The lower the deposit, the higher the interest rate will be. If you’re looking for a lower interest rate, a higher deposit will be required.
The interest rates depend on the amount of the loan and the loan to value (LTV) being requested.
The loan to value represents the risk to the lender; the lower this is, the lower the interest rates.
Some HMOs will require planning permission, depending on the size and number of tenants.
There are certain checks and rules that need to be kept in mind with HMOs. A few to state are:
Our advisers offer a free consultation, so please give us a call or use the “Get in Touch With Us” form at the end of this page
Advantages of HMO Investing
Disadvantages of HMO Investing
Important Information
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
We are a credit broker not a lender.
Advocate Finance Ltd, registered at 55 Crown Street Brentwood, Essex CM14 4BD. Company Register number is 05579380. Authorised and Regulated by the Financial Conduct Authority. Our FCA registration number is 592830.
You can check via www.fca.org
We are registered with the ICO, Z1654205 and you can check via www.ico.org.uk.
We conduct both regulated and unregulated business and therefore not all products provided through us are regulated by the Financial Conduct Authority. We source mortgages and loans from a panel of lenders.
We may receive a commission that will vary depending on the lender, product, the amount borrowed or other permissible factors.