HMO Mortgage for LLP to Secure Buy to Let in Swansea

The Scenario

We were approached by an LLP (Limited Liability Partnership) consisting of 4 people, who’d previously purchased an HMO using a bridging loan, and now needed to refinance.

They had used bridging finance to secure the property because it was uninhabitable at the time, and therefore unmortgageable. However, they’d since invested £50k of their bridging funds into renovating the property, and would shortly be getting tenants in.

So, needless to say our clients were keen to refinance onto a buy to let mortgage as soon as possible.

They needed a mortgage of £300k for the £400k property, however, their options were limited because:

• Not all lenders accept LLP applicants
• Not all lenders are happy with refinancing a bridging loan (it’s seen as higher risk)
• Especially if a part of that bridging loan has been used for renovation costs
• And they didn’t have any tenants in yet, so wanted to use rental estimates for affordability

The Solution

Our client had spoken to estate agents to get a good idea of the potential rental value for the HMO, and we were able to put these to a specialist buy to let mortgage lender.

Despite the challenges of securing an HMO mortgage as an LLP, it’s entirely possible if you speak to a specialist broker with the right market knowledge and industry connections. Unfortunately, if you go it alone, you’re likely to hit roadblock after roadblock, because specialist lenders in this market are difficult to find – in fact, some of them only accept applications through brokers.