Buy to Let and HMO

A long-standing client with significant experience in the buy-to-let and HMO space came back to us with their third commercial mortgage application. This was the client’s first semi-commercial property, with the main part of the building consisting of a large HMO upstairs and two shops downstairs.

3 years of interest only

The income from the HMO alone provided sufficient cover for our stress testing without the need for rent from the two shops, giving us assurance that the client had the necessary experience to generate sufficient income to service the debt. One of the shops had also been rented to a tenant for over 15 years, giving a strong tie to the premises for the business and comfort for us that they would remain.

The clients were interested in taking the financing over three years on an interest-only basis.

The property was being purchased at auction, and a deposit had already been paid, giving us a deadline that the UK Property Finance team was determined to meet regardless of this being a term loan. This was a strong client with considerable net worth, a good income level, and a great credit history across a number of mortgages. In spite of the fact that we had two cases proceeding for this client that had not yet reached completion, we were happy to proceed straight to the indicative mortgage offer (IMO) within one day of receiving the application in principle.

Late in the process, the valuers were advised of a small issue that needed a structural report. When this was supplied, however, it confirmed that the work needed could be done after completion as it was not of a structural nature. This allowed us to make this a condition of the offer, and the case then proceeded swiftly to completion. This case was completed six calendar days after our formal mortgage offer (FMO) was issued.