HMO Mortgage Catch 22Make Text Bigger
Basically, I own a home in Nottingham which I used to live in for 5-6 years. Whilst living there I had two lodgers living with me, but then due to work reasons I had to move out and away from the area. The two tenants were happy and wanted to stay so I decided to keep the house. (I’m also in negative equity by about £10-13K, so can’t sell the house anyway).
Since moving out, the two tenants have asked me if they can have two friends move in with them, plus from my side with only two tenants the house is running at a loss. The extra income would be good because I pay the bills for the tenants and I’ll be able to keep the house in top condition.
The house has always been up to HMO standard, but the problem is my current lender won’t allow HMO’s and I can’t get onto an HMO mortgage. My mortgage is only at 85% LTV and not the required 75% for a HMO mortgage.
I don’t have an extra £15K to put into the house, so I’m stuck.
Eventually, if nothing gives, I’ll probably have to sell the house at a massive loss and it would be a big shame because the tenants really like the house and really want to stay.
I know the HMO is in place to weed out bad landlords, but it’s such a pain for the good ones.
I’ve spoken to the Nottingham council but they were no help as they said they don’t do mortgages.
I’m sure I’m not the only one to be in this situation, so was wondering what other people have done?
Thanks for your help!
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.