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30/01/2014 11:42 am
Hi again folks.
A thought has just occurred to me after thinking back to many conversations I had when setting up my trust deed 35 and three quarter months ago. Yes, I finish it next week, yeeha !!
I recall that I was told that I could not have an overdraft and would have to open up a new account with another bank and that the overdraft I had with my original bank would be classed as credit owed and would therefore be part of the trust deed "pot", as it were.
Reading recent posts on here about that very subject it is apparent that is still the case with so many people having to bank elsewhere.
My point is this. When it came to finally signing up for the TD 35months and three weeks ago, (sorry, but I can't help myself with closure just around the corner !) there was no further insistence of having to change banks so in short I have remained with the bank I have been with for the last thirty years or so. I have continued to use the overdraft facility when necessary, albeit usually just for a week or so before pay day, and not once has this been questioned and obviously my payment to my TD accountants has been there to see on my account on the first of every month for the last three years.
So have I dodged a bullet with this ? Did someone slip up by not insisting on changing banks ? Was it up to me to tell them ? The fact I didn't certainly wasn't down to me being deliberately evasive as three years down the line I have only just thought of it ! Or at the end of the day does it really matter anyway as from my bank's point of view I have been a loyal customer for so long and have continued to be so throughout the term of the TD of which they apparently seem to be unaware of.
That being the case, as you may know with previous posts of mine on here I will have a retirement lump sum coming my way in a few months (after discharge !!) and the intention if I am allowed, is to put down about a sixty percent deposit down on a flat somewhere, a sum which as someone just coming out of a TD gives me a better chance with prospective lenders.
So my question is this, and I know you can't speak for my bank, but given all I have explained, would I stand a better chance of getting a mortgage with them as a loyal customer down the years especially as they seem to be unaware of my TD or will they still do the normal credit checks and ask the same questions other lenders would do, and if they do find out about the TD would they look on it favourably that I have been paying it faithfully and without giving them any problems over the last three years ?
Sorry for babbling on, but when I get started I find it hard to finish !
30/01/2014 11:49 am
Hi A.D.
I think the issue here is that banks still use systems to judge mortgage applications whether they know you or not.
At the start of the process it might therefore be a bit "computer say yes" or "computer say no". For new lending I'm almost 100% certain they'll perform a credit search.
A human being (an underwriter) may look at your case and exercise some discretion if they consider lending to you "borderline" but I think the main influence will generally be a system measuring you against their lending criteria for whichever product you've applied for.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
30/01/2014 12:01 pm
Hi A.D.
Well done on reaching this point of your Trust Deed. It must be a fantastic feeling coming this far and only having a week left. I'm sure this post will give encouragement to others just starting out in the process.
In terms of chancing bank accounts, I advise this for a couple of reasons. The first is that if you have debt with the bank which you bank with and are in your overdraft then this needs to be included into the Trust Deed. It's an Unfair Preference to allow one creditor preference over another and receive their balance back. In addition, there is always the risk that if you do have debt with the bank they could look to freeze your bank account or even try to take the funds in the account.
Another reason for changing bank account is that some banks will not allow a client to operate an account with them if that client has been declared bankrupt or signed a Trust Deed. The last thing we would want is for a client to have difficulties with a bank.
Based on my own experience, when applying for a mortgage my partner and I approached the bank which she works for and has done for a number of years. She works in a bank branch and asked their mortgage advisor about mortgages. They ran their usual checks and wouldn't lend anywhere close to what we required to purchase a property. We had a sufficient deposit and with her being an employee I thought this may help but it didn't. It just came down to the computer system.
It may be the case that if your own bank isn't prepared to consider you for a mortgage a whole of market mortgage advisor may be able to source a mortgage for you.
It's probably a scenario of try it and see.
David is not currently posting in the Trust-Deed.co.uk forum
Topic starter
30/01/2014 1:17 pm
Thanks guys.
And yes David, it is a great feeling so roll on Feb 1 and rest assured I will be back on singing from the rooftops,hopefully not too long after that to confirm my discharge after the form 5 is issued !
I love coming on here especially when someone has just been discharged. The relief and joy in their posts is apparent for all to see and I really enjoy reading them.
To others just setting out, it will fly, by although I have to say in my own case I feel this last month feels like it has gone on forever where as the previous 35 have passed in the blink of an eye !
