HMO Mortgage FAQs

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We have compiled a list of the most common questions we receive about HMO Mortgages. If you’re looking for information on timescales, how adverse credit affects applications or the fees involved (amongst other queries) – you’ve come to the right place.

At ABC Finance Ltd, we pride ourselves on fast and unbiased service and our team always aim to make the process simple and easy to follow. Our team of experts are available to discuss HMO applications – get in touch on 01922 620008 or apply online.

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Frequently Asked Questions

What is an HMO mortgage?

An HMO mortgage is a loan secured against a property deemed to be a House in Multiple Occupation.

How long does it take to get an HMO mortgage?

This really depends on the lender. Workloads and lender timescales for assessing applications can vary week on week. A timescale of 4 – 6 weeks from application to completion is a standard baseline. If a faster completion is needed, please let us know upfront.

Also, if legal work is required, you should check that your solicitor can meet any deadline. Alternatively, you can use a solicitor from our panel who would work alongside us right through to completion.

Is it harder to obtain HMO mortgages?

When you compare HMO against buy-to-let, HMO mortgages are often assumed to be harder to access. However, as they are becoming more popular, lenders are releasing more competitive products and are trying to simplify the process.

Can I get an HMO mortgage if I have adverse credit?

It’s possible, depending on the severity. The more recent and heavier the adverse credit, the higher the interest rate you could expect to pay.

If you have adverse credit or a low credit score, it’s recommended that you make us aware of this upfront. Most lenders will run a credit check on you when you apply, this gives them a good picture of how you repay debts. Some HMO mortgage lenders do not allow adverse credit at all, therefore if you do have missed payments, your application will be declined.

Adverse credit can include:

  • Late or missed payments on unsecured debts such as loans or credit cards
  • Late or missed payments on secured debts such as mortgages
  • Being in an ‘arrangement to pay’
  • CCJs (County Court Judgements) and defaults
  • Bankruptcy and IVAs (Individual Voluntary Arrangements)

If you’re unsure whether you have adverse credit, you can obtain a copy of your credit file. This usually shows you a history dating back six years.

Are there any upfront fees?

ABC Finance Ltd does not charge upfront fees, however, there may be a valuation and some legal fees to pay before completion. Also, the chosen lender may charge an application processing fee or take some of the lender arrangement fee (e.g. 25%) at offer stage.

Can I borrow through an SPV (Special Purpose Vehicle) or limited company?

The simple answer is yes. Many lenders will look to lend to an SPV or limited company.

Can an overseas applicant apply?

There are limited options for overseas applicants, however, there are lenders available who will take consider it.

Do I have to be a homeowner to apply?

If you are a homeowner, there will be a greater choice of lender, however, there are HMO lenders that will allow first-time buyers. If this is the case, the criteria can be stricter and the interest rate could be higher or LTV (Loan to Value) restricted.

How quickly can you offer terms?

We aim to offer an agreement in principle within two hours. If you need this faster, please let us know. If you have any questions or require more information call us today on 01922 620008 or get in touch through our contact form.


About The Author

Lee has built a wealth of knowledge and expertise within the commercial finance sector and has sat on the family management team since 2007. His knowledge of the complex residential investment market led to our growth in the HMO and commercial property investment markets. Lee combines his work on HMO and complex investment properties alongside his work in the bridging loan, commercial mortgage and development finance markets.

Lee Hemming CeMAP  -  
Sales Director

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