Buy To Let Mortgages HMO With 8 Bedrooms
Why use Fair Mortgages
Fair Mortgages can provide a first class service, if you are looking for a buy to let mortgage broker service.
Special features of what we offer include:
- Rental Income Requirements - What lenders now require on rental income - we can help you secure a buy to let mortgage for an HMO with 8 bedrooms and get you through the lender criteria maze
- Whole of Market Buy to Let Broker - We deal with most UK buy to let lenders that are prepared to provide mortgages to landlords including private banks, specialist lenders and wealth managers
- Buy to Let Rates – Access to leading buy to let market rates
- Exclusives - Access to exclusive buy to let mortgage deals not available on the high street
- Our BTL Expertise – Expert help for HMO landlords
- Credit Issues? - We have lenders who will take into account previous defaults and missed payments if applicable
What is an HMO?
A house in multiple occupation (HMO) is defined as any property with three or more tenants, who are not part of the same house but share a kitchen and bathroom. An example of an HMO is a house shared by three young professionals.
HMO with 8 Bedrooms
Any HMO with five or more tenants, who are not from the same household, is classified as a ‘large HMO’. Any landlord with a large HMO needs to obtain a license from their local council. It is an offence to have a large HMO without a license granted from by local council.
Buy to Let Mortgage Under New Regulations
The Bank of England’s Prudential Regulation Authority (PRA) introduced new regulations, which altered the way traditional lenders review buy to let mortgage applications.
Traditional lenders will consider the following when assessing a buy to let mortgage application:
Rental Coverage Ratio - Typically, lenders will require landlords to have a rental coverage ratio of up to 170% for HMOs. It is important to note that a landlord’s rental coverage ratio must be based on the valuation of a professional surveyor.
Income Stress Test - Traditional lenders will implement a strict income stress test. In order to satisfy the lenders’ income stress test, landlords will have to prove that they can afford mortgage repayments in the event that the interest rate increases to 5.5%.
Review of Portfolio - Traditional lenders will no longer provide buy to let mortgages to landlords with one or more properties that are not profitable. Traditional lenders will now review a landlord’s entire portfolio as a part of the application process. This means that if an HMO landlord has a property that does not provide a positive return then their application for a buy to let mortgage will likely be unsuccessful.
Buy to Let Mortgages for Licensed HMOs with 8 Bedrooms
Getting a buy to let mortgage for a large HMO is usually more expensive than securing finance for a small HMO or standard buy to let.
It is not only the new regulations that make it difficult for landlords to source the finance they need, but generally traditional lenders will only provide mortgages for HMOs to landlords with a proven track record in the buy to let market.
Although traditional lenders’ criteria have made it tougher to access buy to let mortgages, it is still possible to access the finance required for an HMO with 8 bedrooms. Fortunately, there are some lenders that have a more straightforward application process and do not necessarily require a proven track record with buy to let properties.
If you need finance for your HMO property with 8 bedrooms then you may benefit from our services.
At Fair Mortgages, we have strong relationships with traditional lenders, private banks, wealth managers and specialist lenders. We pride ourselves on our ability to get landlords with large HMOs the finance they need make their buy to let project a success.
Fair Mortgages may be able to help you. Fill in the online contact form on this website to request a call back from one of our advisers and receive a free initial consultation. Alternatively, you can call us directly on 0117 313 7780.