Scenario:
Our brokers client was looking to remortgage a recently converted vacant care home to a 14 bed HMO, with the aim of raising funds for an onward purchase.
There were four applicants, looking to remortgage the property in a limited company SPV and let it out on a corporate let basis to a well known global brand.
The property was originally purchased as a vacant care home for £800k, with £200k spent on works and change of use was obtained to convert it to a 14 bed HMO.
Applicant Details:
- Applicant Status: Four applicants – all UK nationals, two recent Ex-Pats who were previously residing in Dubai
- Experience: Previous experience with three small 6 bed HMOs
- Income: £70k per annum
Loan Details:
- Valuation: £2.2m
- Loan: £1.65m (75% LTV)
- Rental Income: £13,800 pcm
Property Details:
- Type: Large HMO
- Number beds: 14 bedrooms
- Tenancy: Corporate let for 36 months
Outcome:
We would usually like to see prior experience managing a large HMO and would cap any large HMOs (13+ beds) at 70% LTV. However, we were able to agree this case as an exception outside of our usual policy due to the clients history managing three small HMOs and it being let on a corporate basis, which would help mitigate the work
involved on larger HMOs.
How Lendco can help:
Because Lendco are the experts in lending on HMOs, we are able to help clients looking to remortgage or purchase a large HMO. We have a flexible approach to all types of properties and can consider HMOs with up to 20 bedrooms, including corporate lets up to 36 months. We can also consider longer where there is a break clause or one can be added.
We would love to hear from you and talk through any cases you have. Why not call our BDM team today on 0333 414 1495, or email sales@lendco.co.uk
You can also access further information on our website: https: https://lendco.co.uk/products/buy-to-let-mortgages/