Remortgage for HMO within 6 months of purchase

The client is a motor trader who had also built up a small portfolio of rental properties. He was looking to run down the motor business so that he could concentrate on expanding his portfolio further.

His modus operandi was to purchase a property for cash, refurbish it, let it out, then raise finance against it to start the next project, all in the space of just a few months. In particular, our client favours large, Victorian two-storey houses that lend themselves to becoming 5-6 bed multi-lets but which do not require either planning permission or an HMO licence.

For most lenders refinancing within six months of purchase is not acceptable; however, there are a couple of lenders that can help. We approached Keystone Buy to Let Mortgages which not only accepts these transactions but will lend up to 75% of the enhanced value as soon as the property is ready to let as long as the loan is not more than 90% of the purchase price plus refurbishment costs.

Here are the details of the landlord’s latest property refinance:

Purchase price: £103,000

Refurbishment costs: £45,000

Property re-valued at: £170,000

Loan amount: £127,500

LTV: 75%

Rental income pcm: £1,950 pcm

Rate: 5.89% 5-year fixed

Term: 25 years interest only

Arrangement fee: 2.5%

Completion date: October 2014

This is just one example of how I've helped a client secure a buy to let mortgage. To see more of my case studies please visit my profile page. And if you have any funding requirements, please do not hesitate to contact me. My direct line and email address can be found below.