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Our experienced landlord clients needed to remortgage an 8-bedroom HMO, but faced challenges with standard lending criteria due to its size. Find out how MFB leveraged connections with specialist lenders, efficiently securing a competitive mortgage in 21 days.

At a glance:

  • Full-time portfolio landlords, investing as individuals
  • Large 8-bedroom HMO remortgage
  • Buy to let HMO mortgage offered in just 21 days

 

The Case:

Our clients were a pair of experienced professional landlords who'd invested in property for over 20 years. They've established a portfolio of seven HMOs that they managed full-time, meaning their only income is from rental property.

The HMO property is ideal for young professionals and students as it is on the outskirts of a bustling northern city with easy transport links to the centre. It, therefore, generates a competitive rent and has few void periods. Having worked with MFB to refinance some of their other BTL properties over the last two years, our clients returned to us as their preferred and trusted broker.

 

The Challenge:

The property has eight bedrooms, which is too large for most standard lender criteria. This meant it would need a specialist BTL lender, which often have higher mortgage interest rates than standard lenders. Luckily, MFB frequently deals with complex BTL properties, meaning we have excellent connections to the specialist lenders that accept them.

We approached a specialist BTL lender that accepts HMOs with up to 20 bedrooms. As we frequently work with the lender on cases like this, we quickly collected the documentation and additional information we knew we'd require for the mortgage application and secured the most cost-effective mortgage option for our clients. Our knowledge and efficiency meant our clients avoided unnecessary delays to the application process and secured a new deal in just 21 days, ready for when their Early Repayment Charge period ended on their existing rate.

 

The Finance:

Property value: £600,000

Loan amount: £338,000

LTV: 56%

Rate: 5.50% 5-year fixed*

Term: 20 years, interest-only

Monthly mortgage payment: £1,553

Lender arrangement fee: Free

Monthly rental income: £3,962

Gross yield: 7.9% per annum

 

*Rate as at February 2024.

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