At Dickson Mortgages, are you considering the purchase of a property for house in multiple occupation (HMO) use? Or converting an existing property for HMO purposes? While HMOs offer potentially higher returns than standard buy-to-let investments, they can be intricate to set up and manage, requiring more time. Moreover, they involve increased risk, and obtaining an HMO mortgage requires stricter criteria compared to regular buy-to-let properties. Therefore, securing a specialist HMO mortgage is crucial for your project.
With our comprehensive understanding of HMO properties, Dickson Mortgages collaborates closely with lenders specializing in this unique mortgage type. Our guide outlines the differences between HMOs and standard buy-to-lets, potential uses of an HMO mortgage, the eligibility criteria, and whether an HMO license is necessary for mortgage approval.
To explore your mortgage options and secure a HMO mortgage, contact Dickson Mortgages at 07360 198 995.
What characterizes an HMO mortgage?
An HMO mortgage is specifically tailored for properties designated as houses in multiple occupation (HMOs). It differs from standard buy-to-let mortgages due to the property's nature and rental arrangement.
What defines a House in Multiple Occupation (HMO)?
An HMO refers to a property rented by at least three individuals not belonging to the same household, who share common facilities such as bathrooms or kitchens.
How do HMO mortgages differ from standard buy-to-let mortgages?
HMO mortgages cater to properties housing multiple tenants with separate rental agreements. They typically impose stricter lending criteria due to the complexity and risk involved in managing HMOs.
What are the benefits of an HMO mortgage?
HMO mortgages can yield higher rental returns compared to standard buy-to-let properties, potentially generating increased income from multiple tenants paying individual rents.
What criteria are necessary for obtaining an HMO mortgage?
Lenders often require a comprehensive business plan, a proven track record in property investment, and a thorough understanding of HMO regulations and management.
Is an HMO license necessary to secure an HMO mortgage?
The necessity of an HMO license varies among lenders. While some might mandate it, others might not insist on it but may have specific criteria.
How much can I borrow with an HMO mortgage?
Borrowing limits depend on factors such as property value, rental income, and individual lender policies. Typically, loan-to-value ratios range between 70-80%.
Can I utilize an HMO mortgage for property acquisition or conversion into an HMO?
Yes, HMO mortgages can be used for property purchase or conversion into an HMO. Lenders consider factors like property location, size, and potential rental income.
What risks are associated with HMO mortgages?
Risks include heightened management requirements, increased maintenance costs, and potential tenant turnover. Legislative changes and HMO licensing might also impact rental income.
Do I require a specialist lender for an HMO mortgage?
Yes, many mainstream lenders may not offer HMO mortgages. Hence, seeking a specialist lender experienced in HMO financing is advisable.
To explore your mortgage options and secure a HMO mortgage, contact Dickson Mortgages at 07360 198 995.
Telephone: 07360 198 995
Email: info@dicksonmortgage.co.uk
7 Mare Street, Hackney, London, E8 4RP
Cultivating mortgage solutions tailored to your property aspirations, residential or commercial, in the heart of vibrant Hackney, London.
YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU RE-MORTGAGE.
Dickson Mortgages is an Introducing Broker and operates independently, not regulated by the Financial Conduct Authority or the Solicitors Regulation Authority.
Dickson Mortgages offers execution-only products, empowering clients to make independent financial decisions tailored to their needs.
All mortgages are subject to status and lender criteria.
Most buy to let mortgages are not regulated
Please be aware when using the mortgage calulator, the results are for ilustrative purposes only and should not be considered as a mortgage quote.
A broker fee may be payable upon mortgage application as well as an administration fee. The total fee payable will depend on your circumstances. A member of our team will explain any fees applicable in your initial appointment.