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Portfolio landlords refinance 5 student-let HMOs simultaneously

Portfolio landlords refinance 5 student-let HMOs simultaneously

23.10.18 | Written by: Chris Longhurst

The clients: A married couple from Kent looking to refinance five of their rental properties to repay the existing borrowing where the original mortgages are coming to the end of their terms. In total, the couple own 50 properties all situated in the South of the UK.

The majority of the properties are held in joint names and they are now in discussions with their accountant to decide on whether incorporation is right for their own particular circumstances.

The properties: Five HMO properties let to students in a popular university town. Three of the HMOs have five-bedrooms the other two have six-bedrooms.

The finance: The couple were looking to refinance all five HMOs simultaneously. Both husband and wife were keen to lock all of the properties into five-year fixed rates but with a lender that only has 3 years of early redemption penalties as that is when the majority of the portfolio will be ready for review.

The application process: We needed to source finance from a lender which would accept:

  • Landlords with large property portfolios
  • HMOs let to students

We decided to approach a semi-exclusive, intermediary only buy to let lender which caters for experienced landlords. This particular lender does not impose any restriction on the number of properties held in a portfolio and is also comfortable lending on HMO property.

We worked with the client to collate the supporting documentation, which included an up-to-date property portfolio spreadsheet, a business plan and cash flow forecast.

An offer was received for all five properties within one month of submitting the application.

Here are the details of the deal:

Average Value: £309,000

Average Loan amount:
£217,800

Average LTV:
70%

Rate:
3.88% 5 year fixed

Term:
14 years interest only

Arrangement fee:
2%

Average Mortgage payment:
£704

Average Rental income:
£2,208

Average Yield:
8.54%

Consultant Mortgage Broker: Chris Longhurst, 01732 471607

 

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ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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