Calling in your mortgage
I have taken out an interest only BTL mortgage with Paragon with a 20% deposit for a 25 years term and I noticed that the rules says that paragon can ask for the mortgage to be adjusted at whatever time suits them (after the first 2 years) so for example they can switch the mortgage to a repayment or even call the whole mortgage in when they wish.
I signed and agreed to these terms because I am not worried about this because I have enough cash in reserve to pay the mortgage off right now if I wanted but how do more experienced landlords get round this risk if they wish to expand?
Are there BTL products where the lender does not have the right to change the terms in the same way Paragon does?
Could be quite scary having a handful of mortgages with Paragon should they decide to change the term?
Cheers
Peter Johnson
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Member Since May 2014 - Comments: 252
8:10 PM, 20th November 2014, About 11 years ago
Reply to the comment left by “Mark Alexander” at “20/11/2014 – 18:08“:
Mark,
It nearly brought a tear to my eyes, like a trip down memory lane, mentioning all those names.
The good old days in the early 2000’s of telling the mortgage companies how much you wanted and they just gave it to you and in a lot of cases at rates of .49% to .69% over base 🙂
Member Since July 2014 - Comments: 45
11:27 AM, 21st November 2014, About 11 years ago
Hi Guys,
Can I ask if I am mostly alone on this or are the majority of BTL landlords out there on similar basis to Mark where their BTL loans are fixed with their lenders where terms can not be changed by the lender (assuming the landlord sticks to the rules)? Are there any brokers out there who can shed light on this clause I have with paragon please? Is it just Paragon doing this?
Cheers
Member Since January 2011 - Comments: 12209 - Articles: 1409
11:33 AM, 21st November 2014, About 11 years ago
Reply to the comment left by “Peter Johnson” at “21/11/2014 – 11:27“:
Hi Peter
It is not just Paragon, most lenders who are considered a bit more commercial, i.e. lend on HMO’s, lend to Ltd. companies, lend on large portfolio’s etc. tend to have these clauses.
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Member Since July 2014 - Comments: 45
3:41 PM, 21st November 2014, About 11 years ago
Reply to the comment left by “Mark Alexander” at “18/11/2014 – 09:33“:
Hi Mark,
I am going to be renting the property to LHA tenants, could this in your opinion be the reason as to why my mortgage has gone with a commercial lender like Paragon and hence the eraly repayment clause?
Thanks
Member Since January 2011 - Comments: 12209 - Articles: 1409
3:42 PM, 21st November 2014, About 11 years ago
Reply to the comment left by “Peter Johnson” at “21/11/2014 – 15:41“:
Possibly, you would need to check with your mortgage broker why he/she recommended Paragon as there may be other reasons too, e.g. type of property, Ltd Co. application etc.
.