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Paragon Mortgages FAQ
What is a Paragon mortgage?
Paragon offer a number of mortgage products, providing residential mortgages for those looking to purchase a home of their own and buy-to-let mortgages for those looking to generate income from renting a property to rent-paying tenants.
How do buy-to-let mortgages work?
Many buy-to-let mortgages are interest-only, meaning the borrower is required to pay only the interest on a mortgage from month to month. When the mortgage term ends, they are required to repay the loan in full, usually as a lump sum.
How does a Paragon residential mortgage work?
In contrast, a residential mortgage can be interest-only, to reduce the monthly costs of a mortgage for first-time buyers or require only repayment mortgages. The latter necessitates the buyer repaying a proportion of their loan monthly, with added interest.
What determines the rate of interest on my mortgage?
This depends on whether you opt for a variable or fixed-rate mortgage product. Variable-rate mortgages can be potentially more costly, as the interest to be paid is more volatile over time, which can increase the costs month to month. Fixed-rate mortgages lock in a single rate for a limited period of time.
Why do buyers use fixed-rate mortgages?
Fixed-rate mortgages such as those provided by Paragon and other lenders lock in a cheap rate of interest, especially for first-time buyers looking to keep mortgage costs at a minimum. Rates can be fixed for a handful of years
What if I wish to repay my Paragon mortgage early?
Better cash flow might make it seem preferable to repay early because it would seem to reduce the number of future monthly repayments. However, Paragon may be inclined to implement an Early Repayment Charge, which could make early repayments considerably more costly than expected.
What happens if I default on a Paragon mortgage?
You may face financial penalties for failing to meet the monthly repayments, and your credit score is likely to be downgraded. This is because you would be viewed as a risky borrower to lend to. In addition, you may be required to sell assets, including your own home, if you need a sizeable amount of cash flow to repay outstanding debts.
What do I need in order to apply for a Paragon mortgage?
Most providers expect you to offer ID, as well as financial documents such as bank statements and payslips. These help Paragon build up a financial history and verify your identity. These documents help them assess whether you are capable of repaying the mortgage loan over time.
Where can I compare Paragon mortgages?
NerdWallet has its very own comparison table, specially-designed to provide you with an array of mortgage products by Paragon. Use it to determine which type of mortgage product best-suits your needs, whether you wish to keep interest payments low, or if you wish to occupy a property or rent it out.
Services offered by this provider may change over time. Always check Ts&Cs.
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Koodoo is the trading name of Mortgage Power Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 845978), and is a registered company in England and Wales (company registration number 10978680), with a registered address at Scale Space, 58 Wood Lane, London, W12 7RZ
Fluent Mortgages Ltd is authorised and regulated by the Financial Conduct Authority (FRN 458914), and is a registered company in England and Wales (company registration number 10978680), with a registered address at 102 Rivington House, Chorley, New Road, Horwich, Bolton, BL6 5UE