Refinance for inexperienced HMO landlords requiring 85% LTV

The clients are a couple who work full-time and have started an HMO property portfolio.

In 2014 they had purchased a property and converted it into a 7-bed HMO.

They approached us for helping in remortgaging the property to recoup the refurbishment costs and raise funds for further investment. Crucially, they were looking to borrowing 85% loan to value.

This was a challenge as there are very few lenders who will go to 85% LTV.

Also, the couple’s relatively short period of experience as an HMO landlord was also an issue – most lenders like to see at least three years.

Fortunately, we have access to a lender that was willing to accept the application.

Here are the details of the deal:

Property value: £350,000

Loan amount: £297,500

LTV: 85%

Rate: 5.09% 2 year tracker

Term: 35 years interest only

Rental income: £3,000 pcm

Gross yield: 10.3% pa

Mortgage payments: £1,262 pcm

Lender arrangement fee: 2.5% of loan amount (£5,950)

Consultant: Gavin Elley

Consultant tel: 01625 416398

17th June 2015