Mortgage Availability Improving For Those Completing Scottish Trust Deeds?

03rd August 2010

A few short years ago mortgages were available to pretty much anybody, irrespective of credit status. Mortgage lenders competed to offer the best interest rates, the highest loan-to-value deals and multiples of income that, with hindsight, were simply crazy.

Anyone entering into a Scottish Trust Deed at the time could confidently predict that remortgages would be available to them, at reasonable rates, to release the equity held in their homes.

The “Credit Crunch” brought this situation to a juddering halt. People with perfect credit records and few debt commitments were finding it tough to borrow; those with blemished credit records or high debts were finding it impossible.

This has had a major impact for those who were in Scottish Trust Deeds at the time of the change. Many were expecting to remortgage to meet their commitments to the Trust Deed. Where this became impossible, and equity remained in the home, a significant risk of losing the home was created.

It has also had a major impact on homeowners considering a Scottish Trust Deed. Anyone with equity in their home needs to carefully consider how they can realise that cash to satisfy the conditions of their Trust Deed. Remortgaging is highly unlikely to be available while in a Scottish Trust Deed, so the help of family or friends may be required.

The situation for those who have completed their Scottish Trust Deed may at last be showing signs of improvement. At least one High Street lender appears to be offering mortgages again to those who have recently completed their Trust Deed.

“There are some specialist non-High Street lenders offering products to those who have recently finished Trust Deeds. However with APRs that can easily reach 12% or more, most professional mortgage advisors would encourage clients to stay away” says mortgage-broker Graeme Leckie of Glasgow based Blythswood Associates.

However, Graeme continues, “If a borrower has sufficient income and a reasonable deposit it may be possible to obtain a mortgage at High Street rates”.

“It is important that the information on Experian (credit reference agency) reflects that all outstanding debt included within the Scottish Trust Deed has been satisfied. Provided that’s the case at least one High Street lender will consider lending even if the Trust Deed was completed as little as a month previously”.

It’s certainly encouraging to see a High Street mortgage lender offering mortgages to those who have responsibly met their commitments to their Scottish Trust Deed and put their financial problems behind them.

Many will be hoping that other mortgage lenders follow suit in order that those with Scottish Trust Deeds can quickly move their finances back into the mainstream.

Anyone who has recently completed a Scottish Trust Deed and who is looking for a mortgage or remortgage would be well advised to contact an expert mortgage broker to review their situation (and the wider mortgage market) for them.

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