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  • HMO & Multi-Lets

    Understanding Precise HMO lending criteria

    (*Moderator note:  The title of this thread was changed as it was misleading*).

    Despite claims to the contrary, Precise are not a specialist HMO lender. Be warned that they will be quite happy to take your money to pay for an expensive valuation but will only assess an HMO on bricks and mortar criteria.

    This is no good to the vast majority of us that want to refinance an HMO and is the opposite to what they told my mortgage broker.

    I've outlined my experience with them so far in this thread:

    https://www.propertytribes.com/who-can-c...35939.html

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    No lender is obliged to value on a commercial basis.

    Each case will be taken on its merits and the location and the lenders exposure in the area.

    Precise DO lend on HMOs at bricks n' mortar valuation.  They can determine if your property meets their criteria to be evaluated at the commercial valuation.  If it doesn't, then that is your bad luck.

    What does your broker say about this decision?  Are they fighting your corner?

    If I were in your shoes, I would ask for my valuation fee back and go to another lender, making sure your broker gets a DIP for commercial valuation before proceeding with the application.

    It is completely wrong for HMO landlords to make any kind of assumption that they will achieve a commercial valuation, but many a training course has been sold on that assumption!

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    I'm quite happy to resolve the case by having the valuer fee refunded or my HMO valued at £100,000.

    The claims assessor is not returning calls from my broker. I've asked him to ring me so I can give him a final chance to refund me or increase the valuation to £100,000.

    I think I'm being more than reasonable. If he still refuses to see my point of view I will definitely see Precise in court.

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    Personally, I believe that you are wasting your time, energy, and money and that it would be better to move on.  Precise will never lend to you in the future if you take them to court.   It is their funds and they hold the final decision on how much they will lend.

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    All they have to do is refund me the survey fee. If they don't, it will cost them a lot more when I take them to court.

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    I fear it is you who will find it costs you.  I appreciate you are aggrieved, but this is a waste of your time and energy over a relatively small amount of money and the lender has done nothing wrong in my opinion.

    Sometimes, we just have to take things on the chin, learn from them, and move on.  There is no win/lose if you win and learn.

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    I disagree. They have not applied common sense. They have a computer says no mentality. They are not flexible. They told my mortgage broker on the day of the valuation that they do commercial valuations. Given all the circumstances surrounding the situation they could have shown some flexibility and agreed to refund my valuation fee or give me a £100,000 mortgage. They have not compromised in any way shape or form whereas I have.

    If they don’t at least refund me the valuation fee I will take them to court.

    I’m confident I will win.

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    surely if he has been misled then they should refund.

    the Rics issue comprehensive guidance on the circumstances when valuing HMO's on investment basis and if precise depart from this it should have been made clear at the outset.

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    Yes, I agree that he should get a refund, but not take it to court.

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    but if they are refusing to refund then surely this is a legitimate and justified option (if he has been misled)?

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    You know that most HMO Lenders will only assess "a HMO on bricks and mortar".

    Even those that value on a commercial basis are always mindful of the Bricks and Mortar valuation.

    You typically also find commercial valuation of HMOs come with higher rates, lower loan to value and expensive "long form valuation".

    Most landlords therefore don't want to finance a HMO on a commercial basis for that reason - it often does not add up. Despite what the Guru's tell us.

    I doubt they mislead your mortgage adviser - it is common knowledge that precise do not do commercial hmo valuations. He probably just presumed. So Yes ask for your valuation fee back, some may say your broker should pocket loss.

    RE: Expensive Valuation

    I disagree Precise Mortgage valuation fees expensive. They are rather low, or at least competitive.
    Just £370 on properties worth up to £100k. This cheap valuation should have been a trigger you were not getting what you want.

    HMO Valuations on a "Commercial Basis" require a "Long Form Valuation". They are significantly more expensive than a standard valuation.
    If you think you are getting a "commercial valuation" and you have a cheap valuation fee, ask your adviser to confirm with the lender it will be a "long form valuation".

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    My posts are not financial advice, just a rambling guy passing time on a coffee break.
    The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance.

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