Hi becca84.

If £115000 truly is the market value of the property there would appear to be around £18000 of equity.

I think you need to be very careful.

I'd be looking to get a strong indication of value from my chosen trust deed firm before even considering signing a trust deed in such circumstances.

Just to confirm, that 20% Scottish Government deposit is included in the £96178 mortgage figure? Or is it a sum owed seperately to them in addition to the mortgage?

The 20% is seperate to the £96,000, how did you work out that there would be £18,000 equity in the property as the price has dropped £5,000 since we bought.

That was value (£115000) minus current mortgage (I used £97000). However, the calculation was done on the basis that the 20% deposit was on your mortgage as you had stated.

I wasn't sure that this deposit would have been included on a mortgage which is why I asked about it. It sounds as though the Scottish Government has a charge on the property of £24000 (20% of £120000)?

If that's the case, and the property were sold for £115000, you would be left with a shortfall of around £5000.
£115000 minus (mortgage £96000 + charge £24000) = minus £5000.

That means there is no equity which should mean you don't have a problem.

However, I think you need to have your chosen trust deed firm look through the details of this very closely to confirm the position before you go ahead.

Ok I thought there would be no equity. I have an appointment with ram tenon tomorrow but wanted a heads up

Hopefully there is no issue there becca84.

Dig out all of the paperwork on your home so that the adviser can have a look through it at the meeting (if you haven't already of course).

Hi Becca84

There are different kinds of property schemes, such as shared ownership or shared equity, so it is important that you do take along those documents in order to make sure you can get all the answers that you will need.

Try not to worry!

Good choice of firm Becca,just make sure that you are happy with everything and read it all 3 times to make sure you understand whats involved. And fire any more questions to the board if you are unsure as its an amazing amount of info to take in.

Paul

It is shared equity scheme would this make a difference????

It still means some of the equity isnt yours reducing what equity is there.

Paul

So that would mean that its looking like there wouldn't be any equity???

Possibly becca84, but these schemes come in many forms and can be confusing.

I'm sure the adviser will be able to confirm the position for you when they see the paperwork.

Intersting to note the proposed changes by the AiB/Scottish Government on the vexed issue of equity in homes, which is steering towards the provision for equity to be frozen at the point where the debtor grants the trust deed, thus allowing a debtor that degree of certainty that cannot currently be guaranteed. While the equity freeze is dependant on debtor compliance, it is removed if the debtor fails to meet his or her trust deed obligations. In the event that a house sale is necessary, the freeze on equity is also lifted. That strikes me as a useful way of removing the yo-yo effect which equity plays at the final calculation stage. Time will tell!

Hi Charlie1958.

That is effectively the process in place at many trust deed firms today, with homes being valued at the start and clients being given confirmation that the home will not later be revalued. The firms represented here by Kevin, Mark and Shona do this, as do many others.

You make a good point about the ramifications of non-compliance. That would apply in the scenario mentioned above as well.

Some consistency amongst all firms on this would be good, as would the end of the mysterious £500 "protect the equity" fee charged by some, charged twice by others, and increasingly not charged at all!

Thankfully, they are looking at changing the equity position which should put everyone on an equal basis.

People's homes should be paramount to everything and if the equity can be discussed and agreed at the start, then all the unknowns are taken away and things should be far more straightforward.

Mark