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Paragon launches short-term funding for landlords

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  • 13/05/2019
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Paragon launches short-term funding for landlords
Paragon has launched short-term finance products for property acquisition and refurbishment, expanding its buy-to-let mortgage range.

 

The short-term finance products are designed to help landlords planning to purchase and improve property, as well as those looking to upgrade already-owned property to achieve a better yield.

The range includes three different options to cover standard, light and heavy refurbishment projects. It also extends to projects involving a change of use for Houses in Multiple Occupation (HMOs) and multi-unit conversions.

All options offer loan amounts of up to £1m, with maximum loan to value (LTV) ratios ranging from 65 per cent to 75 per cent and terms from one month to 12 months depending on the option selected. Loans are interest-only and come with a choice of either monthly payments or rolled up interest.

Depending on LTV, terms include monthly interest rates ranging from 0.55 per cent to 0.75 per cent per month for landlords undertaking light refurbishment, with an application fee of £150 and a product fee of 1.75 per cent.

The lender said the loans were suitable for landlords considering simple improvements, those undertaking refitting and modernisation work and those carrying out alterations that needed planning permission, permitted development rights or building regulations.

 

Dual loans

Landlords applying for standard and light finance with a maximum term of six months can also opt for a simultaneous short-term finance and buy-to-let mortgage application on the same property.

These applications will be assigned the same underwriter to improve continuity and customers will benefit from reduced mortgage application fees.

John Heron, director of mortgages at Paragon (pictured), said that short term finance is an important part of the funding mix especially for professional landlords looking to grow or reconfigure their property portfolio.

“As landlord tax changes begin to bite, property refurbishments can offer an attractive route to boost capital value and improve yield.”

 

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