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
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