Thomas Oliver offer HMO mortgage rates for your limited company
Thursday 12 January, 2023
Thomas Oliver’s HMO mortgage brokers work with commercial investors who have buy to let property portfolios. Some of our clients also have HMO mortgages set up on property within their limited company. We offer expert HMO mortgage advice so call us now on 01707 872000.
Can a landlord charge more rent with an HMO mortgage?
John Pringle, mortgage broker in Tottenham, Enfield and North London said:
‘We are receiving a significant number of HMO mortgage enquiries recently as landlords want to understand the benefits of an HMO mortgage, or they are concerned as their HMO mortgage interest rate has increased and want to review their HMO mortgage options.
We explain that in many situations landlords can normally charge tenants more for an HMO let rather than a buy to let. For example, if you were renting out a house to unrelated tenants you could rent out each bedroom independently in the house. If this was a four-bedroom house with one reception room and shared kitchen/bathroom each tenant may pay £800 per month, a rental of £3,200 per month or £38,400 per annum.
If you took out a buy to let mortgage and rented the house to a family, you would have to charge less rent. For example, if you charged £2,500 per month you would get an annual rental of £30,000. In this case having an HMO mortgage would be more beneficial as you earn an extra £8000.
However, you must remember that you normally pay more interest on an HMO mortgage and there may be other costs so these need to be considered in your calculations before you decide to take out an HMO mortgage.’
Should you set up an HMO buy to let mortgage within your limited company property portfolio?
John Pringle, mortgage broker in Tottenham, Enfield and North London continued:
‘HMO mortgages are likely to be more expensive than normal buy to let mortgages. You might have to pay a bigger mortgage fee to set it up and you normally pay a higher interest rate as HMO mortgages are often linked to the LIBOR rate not the Bank of England base rate. Therefore, it is important that you work out the difference between the extra rental you will make compared to the extra cost of the HMO mortgage.
At Thomas Oliver we offer personalised mortgage advice and can review your future income and expenditure, so you know if it is worth setting up an HMO mortgage.
We understand all the HMO mortgage products and can discuss all the HMO mortgage lenders with you and explain all the differences in products available. Some mortgage lenders don’t want to offer HMO mortgages to anyone who is new to buy to let investing but we can research the HMO market for you to see if there are any alternative options.
You might also find that you can only borrow 60-75% of the total mortgage, as HMO mortgages are deemed a higher risk than normal buy to let mortgages, and some lenders will check the interest cover ratio or rental cover ratio before they agree to you taking out an HMO mortgage.
Although there are many conditions that need to be satisfied at Thomas Oliver our mortgage advisors have organised many HMO mortgages for clients over many years and we know which lenders offer HMO mortgages so we can save you time if you are considering setting up an HMO mortgage within your property portfolio.’
Thomas Oliver HMO mortgage brokers assist clients who have a limited company?
Our mortgage brokers are also used to working with buy to let investors who have set up a limited company and are managing a large portfolio of buy to let investments. Our clients appreciate the specialist mortgage advice they receive from Thomas Oliver mortgage brokers, on all the properties in their limited company. We regularly review all their mortgage deals, so clients don’t have to remember to renew their mortgages when their deal expires. Our mortgage advisors have access to a wide range of mortgage lenders so we can always find the best mortgage rate available for the properties in their limited company portfolio.
Call our experienced HMO mortgage brokers if you need HMO mortgage advice for your limited company. There are considerable advantages to owning an HMO property portfolio, but these must be reviewed against any increased costs. Remember our mortgage advisors understand HMO mortgages and will consider what is best for commercial landlords so call us now on 01707 872000.
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.