Paragon's Secured Loan Proposition
Paragon Personal Finance offers second charge mortgages for residential homeowners, with a particular strength in serving landlords who need to raise finance against their main residence rather than their investment properties. This distinction is important — Paragon's secured loan division focuses on loans secured against the borrower's residential home, not against BTL properties, though its understanding of rental income is relevant to how it assesses affordability for landlord borrowers.
The lender assesses income across a range of sources, including employment income, rental income from BTL portfolios, dividends, and pension income. For landlords who draw a modest salary and supplement their income significantly with rental income, Paragon's familiarity with this income structure means it is less likely to cap the assessment at employment income alone.
Loan purposes vary from home improvement and debt consolidation to the common landlord use case of releasing equity from the family home to fund a deposit on a further BTL acquisition. Paragon understands this purpose clearly and does not view it as an unusual or high-risk use of secured borrowing, which can simplify the underwriting process.
Eligibility and Criteria
Paragon Personal Finance's secured loan criteria are focused on prime and near-prime borrowers. The lender is not primarily an adverse credit specialist — borrowers with significant or recent adverse credit history may find better options with lenders whose criteria are specifically designed for that market. For borrowers with clean or near-clean credit, Paragon can offer competitive rates and a confident underwriting process.
Income verification follows standard second charge practice. Employed borrowers provide payslips and P60s; self-employed borrowers provide SA302 forms and accounts. Landlords with rental income need to evidence this through current tenancy agreements and bank statements showing rental credits. Where income is drawn from a limited company as salary and dividends, Paragon can often consider the combined total rather than salary alone.
Property must meet standard construction requirements for second charge lending. Age limits apply to both the borrower and the loan term. The existing first charge mortgage must be with an acceptable lender and in good standing — Paragon will seek consent from the first charge lender to register the second charge before completion.
