We were approached by a client who has been using Mortgages for Business for more than 15 years. In this time he has built up a property portfolio of 10+ rental properties.
The client wanted to turn one of his properties; a six-bed house, into a HMO because the rental income was stronger.
The property value had increased since purchase so we were able to improve the mortgage rate and raise a significant sum of capital for further investment.
We approached a lender that accepts HMOs.
It was able to offer a rate that wouldn't increase his monthly payments greatly.
Here are the deal details:
Property value: £425,000
Loan amount: £265,000
Rate: 3.34% 2 year fixed
Term: 25 years interest only
Lender arrangement fee: £995
Mortgage payments: £738 pcm
Rental income: £2,430 pcm
Gross yield: 6.9% pa
Consultant: Chris Longhurst