HMO Mortgage for Applicants with Poor Credit or Low Credit Score
e have a range of HMO lenders who can accommodate varying levels of previous credit history problems, or a low credit score. Some of these lenders do not perform credit scoring at all. Lending is theoretically possible up to 85% LTV, but lenders will credit score applications above 75% LTV and it tends to be more difficult to pass credit scoring the higher the loan-to-value (LTV).
Mortgages are available for applicants with a poor, or an adverse credit history looking to buy or remortgage an HMO property, or raise capital. Loans for purchase or remortgage and capital raising is allowed
- Mortgage products for all types of multi-let property and blocks of flats
- Adverse credit (ie. CCJs, defaults, missed payments, mortgage arrears)
- Adverse credit
- Low credit score
- Property Purchase
- Remortgage capital raising
Applicants should be homeowners and be able to demonstrate a reasonable level of personal income with an explanation of previous credit problems. Non-Status lending available with no proof of income.
- UK Passport or UK driving licence for ID
- Evidence of deposit funds (bank statement)
- Options for applicants who cannot prove income
- Previous credit problems accepted
- Applicants can be employed, self employed or retired
Types of property
Properties with any number of letting rooms are acceptable. Properties with more than 1x kitchen and multiple kitchens are acceptable. Tenants can have individual tenancy agreements, or sign jointly to 1x AST. Blocks of flats all in one freehold title are acceptable
- Property in England, Scotland & Wales
- Houses of Multiple Occupation (HMO)
- Blocks of flats in one freehold title
- Multiple Kitchens accepted
- Any number of letting rooms considered
General Lending Criteria of Mortgages for HMOs allowing adverse credit
Mortgages are available for purchase, or remortgage up to 85% of purchase price, or property value. Some mortgages with no early repayment charge (ERC).
[give some details about the scope of adverse credit. CCJ, defaults, Mortgage Arrears, Missed mortgage payments]
- Purchases or remortgage
- Interest only or capital + interest repayment
- Properties located in England, Scotland & Wales accepted
- Upto 85% LTV
- Options for No Early Repayment Charge (ERC)
Indication of Adverse Credit Accepted
1. No credit Scoring
2. Maximum of 5x CCJs within the last 5 years.
3. If the CCJs total less than £1,000, were registered more than 12 months apart and they are recorded as being either set aside, or satisfied then no explanation is required.
4. If the total value of the CCJs is greater than £1,000 but less than £5,000, or where more than 3 of them were recorded within a 12 month timeframe, then a satisfactory explanation is required.
5. Where there are outstanding CCJs of any value, a satisfactory explanation is required and they should be settled prior to completion.
6. No missed mortgage, or secured loan payments, except in exceptional circumstances where this can be evidenced with a full explanation.
HMO-4 & HMO-6 products
1. A CCJ/default that was registered more than three years ago and satisfied prior to mortgage application.
2. A CCJ/default that was satisfied more than 12 months prior to application regardless of date of registration.
3. A CCJ/default that is less than £300 regardless of the date of registration and satisfied prior to mortgage application.
4. An explanation of the debt must be submitted with the application together with the evidence of satisfaction (if applicable).
5. Applicants who have had arrears in the last 12 months are not accepted. Arrears over three years ago may be accepted with an explanation (and confirmation that they are up to date).
1. No credit scoring
2. Historic defaults and small CCJs may be accepted if satisfied
3. No missed mortgage payments
No CCJs, mortgage arrears, or defaults in the last 3 years. Any previous adverse is considered on an individual basis.
HMO-1 – Experienced landlords only. Any size property. Multiple kitchens. Maximum 75% LTV
HMO-4-75 – Maximum 8x rooms let, or 4x self-contained flats in the title. Maximum 75% LTV
HMO-4-80 – Maximum 8x rooms let, or 4x self-contained flats in the title. Maximum 80% LTV
HMO-6-85 – Maximum 8x rooms let, or 4x self-contained flats in the title. Maximum 85% LTV
HMO-7 – No previous experience required. Repayment mortgage only. Maximum 70% LTV.
HMO-10 – Virtually any adverse credit over 3 years old. No proof of income. Maximum 70% LTV
Residential Multi-let Investment
Contact us on 0117 223250 to discuss your requirements with a Buy To Let mortgage specialist
Mortgage Application Assistance
We can even complete the mortgage application on your behalf. The mortgage adviser can help you complete the application over the phone or email.
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