25-03-2019

Our latest Case Study looks at a complex situation that involves a buy to let HMO mortgage with challenging restrictions.

The Story

Fox Davidson were approached by a client who had just lost her mother. She had inherited her late mother’s property and had spent her own savings renovating and remodelling the property so that it would be suitable for use as a 4 bed HMO let in Bristol.

She now wanted to remortgage the property for as much as possible so that she had funds to purchase a new investment property, when she finds one in the future.

The Challenge

Most HMO mortgage lenders require current landlord experience so the challenge we faced was finding a lender that would be happy with a ‘first time landlord’ looking to raise money on a 4 bed HMO property. 

Adding to this complication we had to find a lender that was happy for the client to raise and release funds for the purchase of a new Buy to Let property without the client having found this new property. Due to strict Money Laundering Rules, most lenders will require ‘simultaneous completion’ when raising funds to purchase a new property so this added to our restrictions.

The Result

Recently we have seen a rise in smaller ‘challenger banks’ entering the Buy to Let market with criteria that really challenges the large high street banks. Their smaller size and appetite to lend allows for their criteria to be a bit more flexible in the right scenario. We managed to find a lender that was happy with a first-time landlord applying for a buy to let HMO mortgage.

Fox Davidson specialise in the more unusual and trickier lending scenarios. We like to spend the time to get to know our client in order to find them the best solution. On the face of it, this seems like it should be a straight forward scenario but due to lender restrictions it took a little bit more time to find the best solution.  Having a more ‘common- sense’ approach to lending builds the relationship between lender and client and we are happy to find this solution. 

To find out more about buy to let HMO mortgages and how Fox Davidson can help you, call us today.