The Mortgage Cafe

HMO Mortgage for Applicants with Income Less Than £25,000

Situational Profile

For applicants with provable personal income, wishing to buy or remortgage HMO properties.

  • Employed or self-employed
  • Retired applicants with income from a pension
  • Personal income below £25,001
  • Can provide proof of personal income

Applicant Profile

Applicants must be homeowners. No first-time buyers. Applicants must be employed, self employed, or retired and be able to provide evidence to support their income. A clean credit history is required in most cases

  • UK residents with a passport or UK driving licence as ID
  • Evidence of deposit funds ( bank statement )
  • Residential address history for 3 Years
  • Acceptable explanation for any adverse credit
  • No first time buyers

Low but Provable Income

There are now more lenders than ever who just need to see that an applicant does have some form of provable personal income, apart from the rent to be generated by the HMO property. These lenders do not stipulate any minimum income requirement, so any amount of annual income can be accepted, subject to this being in-step with the applicant’s financial circumstances. These lenders are extremely useful for many employed people where commission, or bonuses are not guaranteed, or they have a a second job, plus self employed people with low net profits and retired people with modest pension incomes.

A wide range of properties can be accommodated, with mortgages available up to 85% of property purchase price (or property value for remortgages). Interest only is readily available and applicants do not need letting experience with some of these lenders.

Types of Property

A wide range of properties are acceptable, with or without an HMO licence. Some lenders permit more than one kitchen.

  • Houses of multiple occupation (HMO)
  • With or without an HMO Licence
  • Can consider properties with more than 1 kitchen
  • Lending in all areas of the United Kingdom

General Lending Criteria

Mortgages are available for purchase, or remortgage and up to 85% of purchase price, or property value. Both single AST tenancy agreements and multiple AST tenancy agreements are acceptable. Interest only is available with the majority of lenders.

  • Mortgage terms up to 35 Years
  • Purchases or remortgage
  • Interest only or capital + interest repayment
  • Full proof of applicant’s income required
  • Evidence of deposit funds required
  • Applicants must be an existing UK homeowner or landlord

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