Self-employed expats refinance 5 bed HMO to raise capital

The clients: A couple who have lived in New Zealand for more than 10 years. The husband is British and the wife is a New Zealander. They are full-time property investors and they are looking to expand their portfolio of 19 properties spread across the UK, US and New Zealand.

The property: The couple wanted to raise finance using one of the properties they own in the UK – a 5 bed HMO let to students on a single AST agreement in SE London. The property, a 2-storey mid-terrace house, is valued at £650,000 and generates rental income of £3,250pcm.

The finance: The buy to let mortgage on the HMO had £192,500 outstanding. The couple were looking to refinance it and raise an additional £229,500 to be used to purchase more investment property.

They approached Mortgages for Business for help as their existing lender would not agree to them raising capital because the ownership structure of the couple’s entire portfolio was too complicated for the underwriters to understand and assess.

We knew that the couple stood a better chance of refinancing with one particular specialist lender, so we contacted their business development manager (BDM) to talk terms. As standard, this lender accepts:

• Self-employed expats
• Portfolio landlords
• HMO properties

In principle, the BDM agreed that the couple could refinance and raise the capital they sought.

The application: Apart from a few early morning calls, we mostly communicated with the couple via email because of the 13-hour time difference between the UK and New Zealand.

Collating the documents required to support the mortgage application was fairly quick because the couple are already MFB clients which meant that we have certified copies of their ID, address and income held securely on file. However, they did email through a detailed, up to date spreadsheet of their entire portfolio - address, rental income, occupancy, outstanding mortgage, ownership structure, etc.

We then submitted the full mortgage application to the lender and a valuation of the property was instructed. The valuation report confirmed that the HMO was suitable security for the loan and a week later the couple received a formal offer for the desired amount.

Our case manager is now working hard to ensure that the application remains on track, liaising with all parties to ensure a smooth run through to completion. This is freeing up the couple to search for their next investment property. We expect the case to complete before the end of March.

Property Details

Property value: £650,000

Loan amount: £422,000

LTV: 65%

Rate: 4.39% 5 year fixed

Term: 10 years interest only

Borrower: Joint personal application

Lender arrangement fee: £8,450 (2% added to loan amount)

Mortgage payment: £1,576.56 pcm

Rental income: £3,250 pcm

Gross yield: 5.4% pa

Consultant: Charlie Potter, 01732 471648 or 07814072193


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5th February 2019