Protected Trust Deed - Applying for a Mortgage Once Discharged

bestmumof3

My OH signed a Trust Deed (Scotland) in November 2002. He was discharged in April 2008.

We are finding it quite difficult in getting a new mortgage; despite only requiring it over 8 years and only requiring a 40% [we have over £100k equity].

I have an IFA looking at our best options. One of his suggestions has been a "Second Charge" - type of loan.

In some ways it ticks all the boxes, however, it is quite expensive.

The minimum they look to lend is £30,000; offering us £33,000, however, once everything is paid (brokers fee, legal expenses, interest up front etc),we would only receive £26,850.

However, what the IFA has negotiated (if we agree to this) is no repayments for 9 months. I am going to University full time for a Post Grad course.

Therefore, come April, we would remortgage for the total amount (the originaly £33k loan plus what we currently owe,around £24k for our existing mortgage).

In some ways it ticks all the boxes, but not sure.

Can anyone provide some advice

glasgowgenie

Hi BMo3

Any reason why the TD lasted for 6 years?

I work in insolvency and as a rule, always avoid secured loans. I know the market is tight, however there are still mortgages available. I would always compare 2 or 3.

I would avoid the secured loan and check on line. I use a couple of mortgage/IFA guys and can send details if required.

Mark

bestmumof3

Cheers for reply

Reason Trust Deed took so long as I had an arrangement to "purchase back" the equity in the house, along with 2 joint endowments. It would probably still not be discharged yet, but I sent off a cheque for almost £2k in February to allow it to be discharged.

The IFA we have is really thorough; works for Chase de Vere. He has used this company several times. If we went down this route, we would add £33k onto our mortgage [however only received £26.5k], then re-mortgage in April; therefore the Trust Deed would be discharged over a year.

I appreciate about secured debt etc; but it would only be to allow to study for the year.

glasgowgenie

Hi BMo3

I'm a wee bit confused. I'm not sure if he is definitely discharged and why you would only receive £26.5k from £33,000.

If he is not discharged, you would be unable to add a secured loan as there will be an inhibition in place.

Mark

glasgowgenie

Sorry, I meant to say approx £7k in fees for everything seems very very high and I'm unsure what interest up front is.

The legal costs are the costs of registering the security which is should be fairly minimal.

Mark

bestmumof3

Yes, my OH is definitely discharged. Received letter from his IP indicating this.

Sorry, just realised in my previous post I was talking about 2 different companies.

When I spoke to an IFA a couple of weeks ago and subsequently e-mailed him all our details, including about the Trust Deed, he came back to me and informed me that the lenders he spoke to are reluctant to release additional borrowing. Most would prefer more time to pass, ie from date of discharge.

However, on Friday there, he suggested about this "Second Charge" company. Explained that although we would be adding on £33K to our mortgage, by the time everything is deducted we would only receive £26.5K. However, we would not need to repay anything for 9 months.

I have received all thedocumentation in writing (by e-mail). Think it is similar to a bridging loan.