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Top tips for sourcing HMO mortgages

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HMO mortgages

The HMO sector has seen growing interest as changes to Buy to Let taxation have affected potential profits for landlords.

Some Buy to Let investors have turned to HMOs for greater income yield and portfolio expansion.

Top tips for sourcing HMO mortgages

Assured Shorthold Tenancy – check the number of ASTs your client has in place. Some lenders accepts multiple ASTs and others will only accept one.

Facilities – most lenders will only expect to see one kitchen and one living room in a HMO. If your property has more you may need to source a specialist lender.

Tenant type – your client’s HMO might have a specific tenant type. Check lender criteria for DSS tenants, students and vulnerable tenants.

Number of rooms – HMO lenders have criteria on how many bedrooms they will accept in the property. TBMC works with lenders ranging from a maximum of 4 bedrooms to those with no limit at all.

HMO licensing – check your client’s property is correctly licensed. Properties with 5 or more bedrooms, occupied by more than 1 household will need to be licensed with the local authority. Lenders will require the appropriate licences to be in place before completion.

 

How can TBMC help?

Their team of Buy to Let mortgage experts are up to speed on all the latest lending criteria and product ranges. They have a wide selection of HMO mortgages and can help you to identify the best options for your clients.