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Landlords with varied income remortgage recently converted HMO at 85% LTV

Landlords with varied income remortgage recently converted HMO at 85% LTV

We were approached by a broker looking to source finance for his clients – a married couple who wanted to remortgage one of their recently converted rental properties.

The husband and wife had purchased a semi-detached house for cash in September 2016 and spent the following three months converting it into a six-bed HMO. Keen to replenish the cash they had used to complete the works, the couple wanted to refinance the property onto a buy to let mortgage.

The couple’s borrowing profile and property type caused a few challenges when sourcing a lender because:

  • The couple have multiple income streams – a mixture of PAYE, rental income and dividends from three companies
  • The couple wanted to borrow 85% loan to value – very few lenders offer this ratio (most go to 75%-80% LTV)
  • Neither the husband or wife have any experience in renting out HMO property – something most lenders require
  • The couple’s portfolio consists of more than 15 rental properties – some lenders will not accommodate borrowers with more than ten properties in their portfolio

To ensure that the clients’ requirements were met, we worked with the broker to collate all the necessary documentation required to accompany the application including proof of income, a copy of the HMO licence and evidence of the original cash input for the purchase and works.

The specialist lender accepted the case and the deal went through without a hitch.

This is just one example of how we have helped secure finance for a client, if you have a similar scenario or something you'd like us to look at please get in contact with us on 0345 345 6788 or contact me directly at .

Property Details

Property value: £190,000

Loan amount: £161,500

LTV: 85%

Rate: 4.65% Variable Rate

Term: 10 years interest only

Borrower: Personal borrower

Lender arrangement fee: 1.7% (£2,746)

Mortgage payment: £749pcm

Rental income: £1,600 pcm

Gross yield: 10.1% pa

Broker proc fee: £807.50

Consultant: Erin Gallacher01625 416392


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Mortgages for Business Ltd is authorised and regulated by the Finance Conduct Authority (No. 313537) to transact regulated mortgages. We are a credit broker, not a lender. We work with the whole of market in sourcing a lender for you; we may receive a commission from the lender, and this amount varies between lenders. The FCA does not regulate some investment mortgage contracts. Mortgages for Business Ltd is a founding member of the National Association of Commercial Finance Brokers, the body that promotes best practice within the commercial finance industry. Telephone calls may be monitored or recorded for training purposes.