What is a Personal Guarantee for HMO Mortgages?

HMO lenders frequently require personal guarantees from company directors for limited company HMO mortgages, particularly for larger properties, portfolios, or borrowers with limited track records. This provides lenders with additional security beyond the property itself.

Personal guarantees expose guarantors to personal liability for HMO mortgage debt, potentially affecting personal assets and credit ratings. Guarantees may be limited to specific amounts or unlimited, depending on lender requirements and borrower circumstances.

Before providing personal guarantees, HMO investors should understand the implications and seek legal advice. Some lenders offer portfolio facilities that may reduce guarantee requirements for experienced investors with strong track records.