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HMO Mortgages

If you own a large property, you might consider renting it out. HMO properties are houses in which three or more people live. In effect, you become their landlord. When you allow three or more unrelated tenants to move into your house, you need to get an HMO mortgage. HMO stands for Houses of Multiple Occupancy. These types of mortgages are becoming more and more popular. Since many young professionals move around for work, there is a high demand for temp lets. House shares are a simple solution for these people. Since there are many legal issues associated with this area, it is crucial that you understand it. If you plan to let your property out on an HMO basis, you need to make sure that you speak to a legal professional. Before you do anything, read this guide.

What are HMO mortgages?
Many people wonder what HMO mortgages are and how they differ from other types of loans. Well, these mortgages are specific to people that want to let their property out to a group of people. There are many legal hoops that landlords have to jump through if they want to get this mortgage. Of course, it is crucial that homeowners follow all the proper steps before they get this type of loan. Please contact us to see if you qualify for this type of mortgage. Landlords also need to get insurance. When you contact an insurance broker, be clear that the policy is for an HMO property. That way, there will be no confusion.

HMO rules
Back in 2006, the government set up the rules for HMO licensing. That means that there are some strict guidelines to which property owners must adhere. If the house is three or more stories high with five or more tenants, the landlord needs a specific HMO license. Aside from that, each area has a set of rules or 'guidelines' that you have to follow when you have many tenants. Before you apply for your mortgage, it is important that you seek out this information. Usually, you will find that Citizens' Advice can help you along the way.

What is an HMO license?
When you get an HMO license, it is valid for up to five years. That means that you will need to renew this document at least once every five years. If you plan to let out the property for the foreseeable future, this fact is worth noting. As we already said, it applies to homes with three floors or more where five or more people live. The tenants must share a bathroom and living space. The license means that landlords have to ensure that the place is suitable for the residents. They also have to send the council a gas certificate every year. It also states that the house manager should have no criminal record. You ought to apply to the council for this type of license.

Which mortgages can you get?
There are many companies out there that offer this type of mortgage. Remember, it is a buy to let mortgage. That means that the deposit is likely to be quite high. The lender needs to know that you will have tenants and financial security. It is worth looking around online to see what you can find.

HMO Mortgages

Borrow £25,000 to £2.5 Million
Up to 85% LTV
Unlicensed and Licensed HMO's
Any Size HMO's
Purchase, Remortgage & Secure Loans
Interest Only or Repayment Terms
Professional DSS or Student Tenants
Rate from 3.14%

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