The client, an experienced portfolio landlord, wanted to raise capital by remortgaging a large 7-bedroom HMO in South-West London. Despite the challenges of the property's HMO status and limited lending options, find out how MFB successfully secured a competitive remortgage rate.
At a glance:
- An established portfolio landlord with HMO experience
- A seven-bedroom HMO in London
- Our client wanted to raise capital with a remortgage
The Case:
Our client is an established portfolio landlord with properties that range from ‘vanilla’ (standard) buy to lets to complex, large HMOs.
One such property is a seven-bedroom HMO in South-West London. With many working professionals seeking HMO rental properties and its prime location, the property consistently performed well for our client. Our landlord approached us looking to raise capital from the property to fund future property investments.
The Challenge:
A remortgage with a capital raise is typically a straightforward application to process. However, several factors restricted which lenders we could approach for this case.
Most lenders have a maximum room limit of 6 bedrooms when underwriting HMO properties. Similarly, many have restrictions around background portfolio sizes and a landlord’s overall borrowing across their portfolio.
Consequently, we needed a lender which could accept our client’s criteria while mitigating the higher rates and fees that can come with more complex and specialist cases.
Our extensive knowledge of the specialist lending market meant we quickly approached a lender we knew would be comfortable dealing with this type of application. With the lender’s understanding and experience working with HMO properties and portfolio landlords, we managed to secure our client the remortgage and capital raise at an extremely competitive price point, leaving the client delighted.
The Finance:
Property value: £1,100,000
Loan amount: £650,000
LTV: 59%
Rate: 4.99% 5-year fixed*
Term: 15 years, capital repayment
Monthly mortgage payment: £5,292
Lender arrangement fee: 3% (£19,500)
*Rates as at October 2024
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