Remortgage of unlicensed HMO within six months of purchase

A married couple, both full-time landlords were looking to raise finance against one of their recently refurbished rental properties.

The couple had purchased a four-bed house via short term finance and converted it into a six-bed HMO. Completing the transformation within six months, the couple now wanted to refinance the property onto a buy to let mortgage, whilst also raising enough finance to repay the short-term loan.

For most lenders refinancing within six months of purchase is a no go. This particular property type also narrows down the amount of lenders willing to assist.

Fortunately we have access to a specialist intermediary only lender, Keystone, that was willing to look at the case and offered the following terms.

Property value: £185,000

Loan amount: £138,750

LTV: 75%

Rate: 4.29% 3 year fixed

Term: 20 years interest only

RTI: 145% @ 5.25%

Lender arrangement fee: 2% (£2,775)

Mortgage payment: £496 pcm

Rental income: £2,458 pcm

Gross yield: 15.9% pa

Consultant: Phil Riches

 

ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

 

 

Consultant