Molo Finance launches HMO offering

The lender recently closed a round of funding and said it wanted to expand further into the buy-to-let market with the £266m raised. 

Co-founder and chief executive Francesca Carlesi (pictured) said despite current uncertainty within the market, the lender always intended to launch into HMO this year. 

She said: “We did look at it carefully and that’s why for the last few months we’ve been a bit more conservative with the type of products we launch. 

“With our selection of borrowers we already apply careful criteria.” 

The lender is currently offering two HMO products up to 65 per cent loan to value (LTV), a two and five-year fixed offering for both individuals and limited company applicants.   

The rate for the two-year fixed is 3.05 per cent while the five-year alternative has a rate of 3.44 per cent and there is a 1.5 per cent product fee.

Carlesi said Molo compared its products to similar offerings in the market so it could be competitive, and there is a difference of one basis point on the average rate on both of its deals. 

The maximum loan size is £1m and first-time landlords with a minimum of 12 months’ experience can apply. 

“A lot of people are buying properties right now because of the changes with the stamp duty and so on. At the same time a lot of lenders are limiting what they offer or the houses they lend on.

“We want to be there for customers, and we do see an opportunity to make sure customers can get a mortgage,” Carlesi added.  

She also said the lender’s digital, direct-to-consumer proposition also made it an easier option amid physical restrictions and risks around the Covid-19 virus.  

Molo primarily relies on automated valuations and only refers to a physical inspection if the initial check fails to confirm the property value. 

Carlesi said: “We have a unique window of opportunity now, because the whole market is a little bit stuck in terms of physical proximities. With us they can do it from the comfort of their own home online without incurring any risk.” 

Also, the online platform means customers can apply for property finance at times that suit them, Carlesi added. 

“The habits are shifting,” she said. “Now [borrowers] know they can go online and get a mortgage at any time, we’re seeing a lot more out-of-hours activity on weekends and evenings.  

“Before it would have been concentrated on those moments when people thought lenders were open but right now we’re home 24/7 so it makes a lot of sense. 

“Our habits have shifted with regards to when and how people get a mortgage.”