Houses in multiple occupation (HMO) mortgages for Landlords

Q: Is is possible to get a mortgage for a property that is split up into 7 bedsits? I have been told i need a commercial mortgage for this property, why is it i cannot get a BTL mortgage to buy this and can you reccomend a lender where i can get at least 80% LTV or even 85% LTV like my other BTL properties? -Steven H from Somerset. Posted April 16 2007

A: Hi Steven. Most buy to let lenders will not lend against a property which has shared facilities - like a kitchen or bathroom. Or any property where there are multiple tenants residing under the one household - such as with properties converted into bedsits or rented rooms. Such a property is termed a HMO or House in Multiple Occupation, and falls outside the lending criteria of most Buy to Let lenders, unlike a property that has been converted into self-contained letting units. HMO properties are deemed to represent higher risk lending.  Althought these HMO properties can be good investments, they do however pose a limitation on the choice of funding available to the BTL Investor or Landlord. This is why often a HMO property can be purchased at bargain prices.  If you want to ratain the gearing of 85%LTV then visit this commercial mortgage broker website who have been able to source specialist mortgages for landlords remortgaging or purchasing HMO property at upto 90% LTV and a rental cover of 115% over the mortgage.Click here Mortgages for HMO property Self Employed small business Self certification mortgages

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HMO Purchase and Renovation Exclusive Mortgage

NEW: For Property investors looking to purchase "scruffy" property cheaply for profitable multi occupant letting.  HMO investor can now pick up the HMO property bargains with this brilliant mortgage aimed at the HMO Landlord and investor looking to buy HMO style property in poor or outdated condition - the kind of property that FAIL the rental assesments and safety regulations! If you have your eyes on such a property for a quick renovation into a profit churning asset BUT cannot find any lender to Mortgage it. The HMO Refurbishment Mortgage will give you 85% of the purchase price with no rental assessment, to buy the property in to you ownership. then you can carry out all your refurbishments to the property within 3 months of completion to make it suitable for HMO Letting - A simple (just £85.00 fee) re-valuation and inspection of the property by the lenders appointed valuer and get further borrowing of upto 85% of the Improved property value to quickly recover your funds and possibly raise further capital for your next project. For more information on this mortgage visit the HMO Purchase and Renovation Mortgage page.

Editor CMF