MUFB Mortgages & Lenders Explained

Here at Rangewell, we help property investors raise the finance you need at rates that work for you. We’re specialists in all forms of property and have expertise in the more challenging areas of finance – including securing loans for MUFBs. Speak to our team today to better understand MUFB mortgage lenders and secure the loan you need. 

What is an MUFB?

Unlike an HMO, where tenants share many of the communal aspects of the home, an MUFB offers a private entrance, kitchen and bathroom space. You don’t need a licence to run an HMO, and each tenant signs their own individual assured shorthold tenancy agreement - making it a more traditional arrangement similar to other buy-to-let properties. 

However, MUFBS tend to be more financially lucrative than single-tenant properties and HMOs, offering higher yields and more income security. Having a number of tenants signed to ASTs means even if some leave, you’ll have income whilst you search for new occupants. 

The biggest drawback is the lack of lender support. Mainstream lenders view MUFBs as complex investments and typically hesitate to offer commercial mortgages unless you have the experience and business acumen needed to create a compelling application. 

MUFB mortgage considerations

To secure an MUFB mortgage or loan to help you acquire the freehold, you’ll need to consider the following:

• How will you treat ownership in terms of company structure? Lots of MUFB buyers split ownership of freehold and leaseholds between subsidiary companies. How you intend to structure your business will impact your ability to get a loan. 
• Some lenders set limits on the number of flats within an MUFB – this is often a maximum of 10. If the property has more than that, you’ll need support from a specialist like Rangewell to help you find adequate finance. 
• Research the area before pursuing a purchase, as some locations will have higher demand for MUFBs than others. In areas popular with students, you may be better off finding an HMO to invest in. Lenders will assess the potential value of the business before making a decision, so early research helps strengthen your case.
• Lenders will expect a MUFB to return enough profit from rental yield to cover any associated mortgage payments, so make sure you do any calculations and forecasts ahead of time to improve your chances. 

We can talk through all of these factors and more when you speak to our team. Get in touch now if you’re considering a MUFB acquisition, and see how we can get you a successful MUFB mortgage without any of the frustrations. 

Finding MUFB mortgage lenders

To find MUFB mortgage lenders, you can speak to our team and cut down on wasted time and effort. We’ll talk through your plans, advise you on the right lenders and even negotiate on your behalf to ensure you get the best possible rates and terms. 

Whilst mainstream lenders may be hesitant, there is still a wide range of lenders in the market who are willing to support your investment. They will typically offer up to 75% LTV, but this can be flexible depending on your discussion with the lender. 

To maximise your chances and get the best possible rates, speak to Rangewell today.