Paragon return to the buy to let market

Paragon Mortgages have made their return to mortgage lending this week after more than a two year absence. They have secured access to £200 million of funding and are clearly confident that they can access more money if necessary. During their time away from lending they have been working with their existing customers. They currently have around £10 billion under management and prior to the credit crunch, they say that they lent 1 in 10 buy to let mortgages since they were formed in 1995. The buy to let specialists return is welcome news. Two weeks ago Lloyds Banking Group made some big changes to their lending criteria and the amount of properties one person can buy. This was reduced from 9 to 3. The maximum loan amount was also cut from £3million to £2 million. Paragon will allow new investors to have a maximum of £5 million per client, although at the height of the property boom this was £20 million. Paragon are a lender that mainly offers mortgages to professional investors, but they will also lend to first-time landlords, providing that they already have a residential mortgage. They will lend in areas that many other banks will not. They will consider lending on part commercial, houses of multiple occupancy and to limited companies. They will also lend on single properties divided in to a maximum of 20 units on an individual basis. Their rates are competitive and they are offering either fixed or tracker rates to investors will a minimum deposit of 25%. Two-year fixes start at 5.30% and two year trackers at 4.30%. Both mortgages require a 35% deposit and the arrangement fee is 2.25%. October 4, 2010