hmo finance gatehouse
In assessing the HMO's value, lenders might consider your rental income. This is especially useful if you are trying to withdraw equity or have converted the property.
HMOs are not valued by all lenders based only on rental income. Lenders will instead value the HMO as a standard house. This can limit your ability to borrow money, which can defeat the purpose behind an HMO mortgage.
HMO properties have higher yields, but are more complicated to set up. HMO licenses are required depending on the nature of HMO properties.
In assessing the HMO's value, lenders might consider your rental income. This is especially useful if you are trying to withdraw equity or have converted the property.
HMOs are usually restricted to certain places. HMOs may be targeted at students, single professionals, or other tenants. HMOs often have restricted locations. They are usually located in the city centre or close to major amenities and bus routes. It would not be a good idea to set up an HMO in rural areas in the middle and end of nowhere.
HMO properties are more likely to yield higher yields but they can be more difficult to set up. A HMO licence may be required by landlords depending on the HMO's nature.
A HMO mortgage lender will also take into consideration your rental income. This can greatly increase the amount of mortgage available. HMO mortgages may be offered at variable or tracker rates. LTV rates start at 80% LTV. Lower deposits and higher LTV ratios lead to more attractive rates.
You should also consider void periods. An HMO has more void periods than a traditional buy-to-let. HMOs may have higher maintenance costs than traditional buy-to-let models. This is due to shared communal areas like bathrooms, kitchens, and living rooms (where appropriate).