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Scottish Trust Deed Forum
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Topic starter
10/01/2014 4:21 pm
Hi, I am coming to the end of 36 months in my TD [:)] 2 more payments. I have just over £5,000 equity to pay afterwards, this figure was fixed at the start and I have the option to extend or refinance. I know releasing equity has been near impossible for the past few years but I wonder if anyone know the reason for this? Is it because of the TD and credit score or because most mortgage lenders only allow borrowing up to 75% or something else? I think if I borrow the £5,000 on my mortgage I will still be within the 75% LTV range due to the outstanding balance coming down with repayments and a slight increase in property value. I meet all of the criteria listed on my providers web site for additional borrowing. However, I am not sure if I will be rejected anyway because of the TD. Can anyone provide any insight? Finally, should I think about applying now or after 36 months are complete - does it make a difference?
10/01/2014 5:53 pm
Hi SuziW.
Are you sure you want to refinance the house? You'll be paying interest on that sum for years. If you extend the trust deed there's no interest being added to the sum.
The fact of the situation is that mortgage lenders perceive that people in trust deeds, or who have recently completed one, are comparatively risky borrowers. High loan-to-value lending is also risky. Mortgage lenders have much less appetite for risk now based upon their experience of the credit crunch.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
Topic starter
10/01/2014 5:59 pm
Hi TDA, no I'm not sure at all lol, trying to balance the idea of being discharged very soon and having the extra income via refinancing or continuing with an extension. I just did the sums and you are right, it would cost around double in the long run to add to the mortgage. But if the mortgage lender would say no regardless it solves any decision.
10/01/2014 7:21 pm
It's a long time since we heard of anyone refinancing prior to discharge SuziW, so it may not really be a choice anyway.
An extension, even if it's not a true choice, might work out better with hindsight in the future.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds
