Experienced landlord remortgages two 5-bed HMOs

We were contacted by a broker who was looking to place a deal on behalf of his client.

The client is an experienced landlord and also works full-time as an estate agent. He was looking to remortgage two of his buy to let properties to raise capital for further purchases.

The properties he was looking to refinance were two, almost identical HMOs, located in the same road in Essex. Each property had five beds over three storeys.

The broker’s options were limited in placing this case because:

- Not all mainstream buy to let lenders will accept HMOs and if they do not always to 5-beds

- The client’s income without rent and bonuses was below £25k per annum 

- The client had a large portfolio of investment properties, not fitting the profile of most mainstream lenders

Fortunately we have access to a semi-exclusive lender who was able to assist. Here are the details of the deal:

  Property 1 Property 2
Property value: £260,000 £260,000
Loan amount: £195,000 £195,000
LTV: 75% 75%
Rate: 4.59% 5 year fixed 4.59% 5 year fixed
Term: 10 years interest only 10 years interest only
Mortgage payment: £745 pcm £745 pcm
Rental income: £2,273 pcm £2,273 pcm
Gross yield: 10.49% pa 10.49% pa
Lender arrangement fee: 2% (£1,267) 2% (£1,267)
Consultant: Gareth Richards  
Consultant tel: 01732 471627