Paragon returns to BTL mortgage market, with new Securitised Mortgage Funding.

Thrugelmir

Blacklight wrote: »

If you look at the BTL mortgages on offer the rates aren't bad but you get stung on the fees.

.

This the way commercial lending works. Just the same for Companies. Fees are part of the cost of arranging finance.

The days of no fees are gone.

As Hamish says Paragon will securitise the debt and sell it on. They'll make there money from the upfront fees together with a handling fee for collecting the "repayments" from customers.

Nothing new in this. Very similar to how CF Capital and Investec work with Corporate equipment leasing. Best consumer example is DFS.

Thrugelmir

chucknorris wrote: »

A few weeks ago we were looking at btl rates, it didn't take us long to realize that remortgaging our own (unmortgaged) house was the much better option, to take advantage of the better rates on offer.

If your lender plays ball that is. Far from certain.

System

HAMISH_MCTAVISH wrote: »

You really didn't read the OP, did you?

It ain't 200 million....

It's a revolving 200 million facility and they'll be securitising off the loans.

No but, yeah but, no but BTL IS DEAD SO NER!!!

(Or some other unrelated remark)

datostar

Joeskeppi wrote: »

One of the biggest BTL lenders during the boom. Please, for the good of the forum, get a clue, and then post.

Probably the biggest 'BORROW TO LEND' player now, because that's what they've done. How innovative.

JonnyBravo

brit1234 wrote: »

I still believe they are toast.

No doubt you're using your amazing foresight to short this stock and make a fortune.
You've got a good track record in predictions haven't you?

chucknorris

Thrugelmir wrote: »

If your lender plays ball that is. Far from certain.

I think it would be fairly certain, two pofessionals wanting to borrow less than twice our income and only about 50% LTV. First Direct seemed to think so too when I asked them.

Kenny4315

It's obvious your going to pay more for BTL finance than residential, so comparing rates between residential and BTL is pointless. BTL portfolios are often mulitple times the value of the main residential property, and gaining finance to build a portfolio is easier done via BTL products even if they cost more. The thing at the moment that is ridiculous is the % of mortgage fees, say 2% or 3% which take the mickey.

chucknorris

Kenny4315 wrote: »

It's obvious your going to pay more for BTL finance than residential, so comparing rates between residential and BTL is pointless. BTL portfolios are often mulitple times the value of the main residential property, and gaining finance to build a portfolio is easier done via BTL products even if they cost more. The thing at the moment that is ridiculous is the % of mortgage fees, say 2% or 3% which take the mickey.

Might be obvious now but before the crash it wasn't. My current BTL mortgages are all lifetime trackers between 0.38 and 0.68% above the BOE base rate. The highest fee I paid was less than £1k. I wouldn't touch the current deals on offer with a barge pole (not that I am looking now anyway)

Kenny4315

On 3 flats which I bought a few years ago I had on a 3 year fixed at 5% when BOE was around 4.5 to 6%, and then they reverted to a life-time tracker 1.65% above base when out of the fix. Would like to release some cash but not going to rock the boat, when they are raking it in at present. Suppose will only be an issue if interest rates rise to say 6 or 7 % in which case the whole country will be stuffed anyway.

The whole point is BTL will always exist in one form or another regardless of what some btl haters wish. Although I would conceed that those with zero idea why they bought and no plan are likely to be in the doggy do-do.