Hi Floyd

I think this is one of those areas which certainly need to be tightened up.

I would suspect the majority will look at the figures at the start, irrespective of the position 3 years later. The reason I say this is that they key element to any Trust Deed is the actual proposal to creditors sent at the beginning. That is what they agree to.

It is also about balance. I think most people would complain if the value dropped, however would they agree if the value rose in 3 years. That said, they should be flexible as they can't really have it both ways.

Best advise is to speak with your Trustee and advise him of the potential drop in value. Hopefully he will compromise.

Mark

Thanks for the reply Mark, I'll phone them on Monday. What I'm worried about is if there is not enough equity to cover the amount, I'm going to find it impossible to either get a secured loan or mortgage to cover it.

Hello Floyd.

I'm afraid it may be difficult to get an increased mortgage or secured loan at all.

Mortgage lenders are very risk averse at the moment, and have been for some years. Your trust deed may stand in the way of raising the cash this way.

How much do you think your property is worth?

How much is owed on mortgages right now?

How much are you being asked to pay to cover equity?

Hi, The property was valued at £150,000 3 years ago but looking at what it says on the web now for my area and type of property I could be looking at £130,000 - £135,000. I owe around £122,000 on my mortgage and I was being asked to pay £19,000 of equity.

Thanks Floyd.

Is it jointly owned or just by you?

Hi, It is jointly owned.

Is it just you in a trust deed Floyd or is the other property owner as well?

Just wondering where the £19k figure came from.

Hi, no it's a joint TD, or 2 separate ones for myself and my wife. The 19K came from the original valuation minus the money owed in the mortgage at the time, then split in half so on mine, it states £9225 and the same figure on my wifes.

Were you told you could remortgage your home to raise the equity in advance of signing the trust deeds?

Mortgage availability was already seriously curtailed by 2009.

Yes, we were told it would be an option but he did say it may be difficult to find one that would take it on. He also did say that if house prices rose we may have more to pay, but if they fell it may be less.

I'm glad you got that warning Floyd.

Speak to your trust deed firm on Monday. It all perhaps depends upon precisely what your proposals to creditors stated.

Sometimes it's a sum fixed at the start of the trust deed, other times it may be understood that the value will be reviewed.

Either way, you may need to also think about (and perhaps ask about) how you'll raise the sum for equity, however much it ends up being.

I will, thanks for your help.

It sounds as though it would be in your interest if it was valued at less, but even then how are you going to raise the funds? I would also suggest you talk t the trustee to get this sorted as soon as possible. If the equity has dropped, it may be that you could continue with your contributions for a while, in order to raise the extra funds.