Hi niceadvice

Actually it's a very valid question and its important that the figure is agreed and clarified.

Rather than obtain the mortgage balance, you should request a mortgage redemption as this will be the outstanding mortgage plus any early settlement penalties etc. this can make a big difference if there are early settlement penalties which can add several thousand on top of the mortgage balance.

We will look at the valuation less the redemption figure and whatever the net figure is, that will stand through the trust deed period as there are no 2nd valuations later on. That way before people sign the trust deed, they know exactly the position with equity.

Mark

In my experience, creditors will usually accept the amount of equity being discounted a little to take account of the costs that would be involved if the property was being sold. The equity figure is therefore effectively a few thousand less than the calculation above

Hi Mark

I checked and you're right, there is a penalty for early settlement which I think will put property in negative equity as the mortgage itself is just over what 2 properties the same sold for, even without the penalty being added.

Your right Mark about the property being the main worry, at least I am a lot happier with the information and now see that this shouldn't be a problem to worry about.

Different firms seem to look at equity issues in different ways niceadvice, so it will pay to understand exactly how any firm you're considering choosing will handle this in advance (if you haven't made a choice already).

It really is incredibly important to get this right. Issues connected to equity have for many years been the number one source of really tough problems that visitors have brought to this forum.

Hi TDA

Even with all the changes in legislation/guidance in the last 20+ years, the position with property has always remained people's no. 1 concern and as you say, it is imperative that this is agreed at the start. We always seek a valuation and obtain the mortgage balance and confirm the position in writing so there are no unknowns the the period of the trust deed.

Mark

We would always get a valuation in advance of a trust deed being signed too. In fact, we will often get two valuations!

Right at the start of the advice process I find it is useful to get a desktop valuation from a surveyor, so that different options can be discussed with a little more certainty about the equity position. This would then be followed up with a proper written market valuation prior to a trust deed going ahead, if indeed a trust deed is likely to be the chosen route.

Hi Mark

I just wanted to double check that the loan attached to the mortgage which is definately unsecured would be a claim and they would not take back the house if I entered a Trust Deed.

Our mortgage was the greatest concern to me when looking at entering the Trust Deed(s).

With all the firms I spoke to in advance I always asked what their position was on this matter.

Three of them said they would confirm the value at the start and depending on this value would issue a note confirming they had no interest in the property.

One company said they would value the house but then come back and value it again at the end of the TD and would seek the difference in the equity value if it was significant. For me this presented total uncertainty and as such I ruled the company out immediately.

In the end I made sure with the company I went with (RMS Tenon in the end) that I had it confirmed in writing the position with the house value along with what happens with wage rises, bonuses, windfall amounts etc. It took allot of question asking on my part to have this confirmed with all the companies I considered and thankfully they were all much the same with their position and answers. At the end of the day RMS for us was simply the clearest and quickest to answer each question. This was the decider for us in selecting them.

Hi niceadvice

Yes it would be an unsecured loan in the trust deed.

The normal process is for NRAM to continue to take the deductions for the unsecured part until the trust deed is protected, then they will cease payments and, believe it or not, return any money paid from the date of signing to the date of protection.

As a creditor NRAM are always pretty good to deal with.

Mark