Scottish Trust Deeds - confused

lmclean100

Hi

I'm new to the Scottish Trust Deeds site. I've got a few questions.

I've tried to get a remortgage - I've got a mortgage and a secured loan on the house. The remortgage was with a different mortgage company but they undervalued the house by approx £25K, saying that as no houses like ours had sold since 2004 they couldn't give an accurate figure. Halifax had valued our house about 4 weeks previously at the higher amount but the new mortgage company won't accept their valuation which I quite understand.

Anyway the new mortgage company only offered 66% LTV, which isn't enough to pay off the original morgage and the secured loan - it's £3K short and the secured loan company won't accept this as they say it goes against their new guidelines.

On top of this I've got about £22k of debts in various credit cards and one loan.

I'm thinking about a Scottish Trust Deed as I've got my mother living with me and she's got Alzheimers which is pretty stressful on its own without the worry of the debts as well.

I'm a bit confused about what happens with the house. Please let me know if I've got this right. The Trust Deed runs for three years and you pay all of your available income to it to pay off your debts and just before the end of the 36 months, the amount outstanding on your debts is paid off by you remortgaging or getting a secured loan on the house. This is where I'm a bit confused - if you need to get a remortgage or secured loan, one of the questions they ask is are you on an IVA or Scottish Trust Deed and if you are I've heard that you are refused credit.

Would you be able to explain this to me?

Thanks

Charco_2

Yes you'll be asked if you have been in a IVA or TD but that does not necessarily mean that you would be refused credit... you'd probably have to go to a sub-prime lender but you would still be expected to release all the equity in the property.

Other methods of releasing the equity might be
- a further secured loan (so only going subprime on the amount outstanding)
- a lump sum contribution from a friend or family member OR
- an increased period of contributions (usually only available if your equity is around £4-5k or less)

Also, generally speaking the value of the house for the purposes of a TD will be set by a Surveyor or other professional. Estate Agents valuations probably wont be good enough a neither would a mortgage lenders guesses!