hmo btl mortgage calculator
What returns can I expect from an HMO
Complex property types are more risky than others. Lenders that don't want to lend to them will not be willing to do so. Those who do will have to meet their individual criteria.
What kind of tenants can my HMO target with? - Low cost housing, affordable housing or housing benefit tenants: Sometimes landlords will let their whole properties to the local authorities. They get a discount, but still earn an income. - Working professionals - An increasing number of renters are in their late 20s or 30s. They are seeking higher-spec properties, often with more bathrooms, and less party-life-style tenants. -
What returns can I expect from an HMO
Lenders might accept evidence that you have applied for an HMO license in place of the actual licence. This is because it can take longer and may not always be practical. You may be considered 'fit and proper to operate an HMO if you have the licence. However, it is a good idea to have the license readily available in order to facilitate the application stage underwriting.
HMO mortgages are currently offered by 27 lenders to individual applicants and 23 to limited businesses. HMO mortgage rates tend not to be lower than the vanilla buy to rent counterparts, as they are a special property type. Lenders have benefited from increased competition in this market, which has resulted in rates starting at 1.64% to individuals and 2.69 for limited companies.
What is the cost of obtaining a HMO licensure? The cost of obtaining an HMO permit will vary depending upon where you are located. Some councils may charge by the number or bedrooms of a property. Others will charge an additional fee, which can be anywhere from a few hundred to several thousand. Lenders will be aware of the length of time it takes to issue a licence and may accept proof during the underwriting process of a mortgage. However, it's important to plan ahead so you don't get stuck at this point.
Many HMOs can be furnished fully. This adds an additional cost. Traditional buy-to-let properties are often rented unfurnished.