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As a professional landlord or investor it is important to understand the finer aspects of an HMO prior to making an investment. The lending market has undergone a sea of changes since the pre-credit crunch era when funding with three or more occupiers was easily accessible. In the current market, procuring a buy to let mortgage for an HMO is not easy when compared with the pre-credit crunch. However, there are still a number of specialist lenders willing to help landlords seeking finance or refinance on an HMO property. HMO mortgages are designed to accommodate multiple tenants. What is an HMO Primarily, an HMO or House in Multiple Occupation is a property let to three or more tenants who form two or more households, are not related and have access to bedrooms but share other living areas such as a kitchen and bathrooms. According to UK laws some types of HMOs require appropriate licensing from the local authority that has the responsibility to determine whether a property is eligible for classification as an HMO and can be granted a license to operate. Higher return on investment Over the past few years the demand for an HMO has increased significantly due to a large section of society looking for cheaper options like shared accommodation. Landlords and investors who have the opportunity to expand their portfolios with a buy to let HMO mortgage and potentially generate higher yields than a standard buy to let property. The average yield can be as much as 3.6 percent more than mainstream properties. It also lessens the impact on their cash flow during any lean periods. Many HMO remortgage lenders are usually accessible only through intermediaries. Some brokers do not charge any fee upfront and only accept payment once a mortgage deal is completed. HMO mortgages are available up to 85 percent of the value of the property while a higher deposit attracts a cheaper rate of interest. Some lenders prefer dealing with experienced landlords although they do not need specific HMO experience. The rules and regulations pertaining to HMOs are complex. Therefore, it is prudent to talk to a buy to let broker with market experience and access to specialist lenders. Some HMO remortgage lenders only permit applications from licensed HMOs. The potential of student lets Student lets are also deemed a form of HMO. Student letting is one of the rewarding sectors that landlords can take advantage of. However, there is a unique set of regulations and criteria that landlords need to comply with. It would be prudent to buy a property in a university town with a large student population. This type of property can also be placed in a child’s name as long as you stand guarantee and use your home as collateral. It is essential to obtain a HMO license if you let your property to a large number of students. The cost of a license varies between individual councils. The cost is inclusive of an inspection of your property by the authorities. However, it is well worth the cost when you have the potential to obtain an HMO mortgage and earn a significant return on your investment. Author is associated with a Loan providing company in London. They are able to arrange short term and long term property loan to fulfill your need; Here, He keen to provide detailed information on foreign national mortgage along with HMO remortgage to choose best mortgage provider that suits your need.
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