I should also add that as we bought our home just before the market crash, our house is in negative equity. Also I think our Trust Deed is individual even though we are a couple as we each make an individual payment each month.

Welcome to the forum Aitken711. I'm sorry to hear of all of this disruption.

You are correct that your trust deeds will be individual, they always are.

I think you should investigate exactly how much you'll be expected to pay for the 25% element as (as you have already pointed out) the chances of getting an increased mortgage while in a trust deed are currently negligible.

You could then discuss with your trustee whether it will be viable for you to pay this additional amount, cover all of your other bills and expenses, and continue to pay (a perhaps adjusted) amount into your trust deed.

Do you consider it to be a priority to remain in this home?

Thanks TDA. I have contacted the appropriate company today to find out what happens if I can't remortgage. I think I would have to have my house valued in order to find out what it is worth and then work out the 25% of the current market value. I have a feeling the interest on the 25% would make my mortgage payment a lot more than it currently is.

Because my son is at school I'd rather stay local & don't think I would get a council house anytime soon if I applied. I would have to consider moving if there isn't a valid financial solution to my problem though.

Please feel free to continue the thread here once you've received a little more information Aitken711.

Hopefully there will be a way to navigate through all of this.

Hi Aitken711,

It sounds like you have found yourself in a bit of a tricky situation unfortunately. It’s a good thing that you are trying to think to the future and about the consequences of the 25% debt to the home builder next year.

I think you will need to establish what your liability will be to the home builder per month in terms of an interest payment. If you find that this is just too much for you then you need to speak with your Trustee about your payments to the Trust Deed and your available options. You could speak with your current mortgage provider to see if you are on the best deal possible as something you can transfer products with the same company onto a better rate.

If ultimately once you need to pay the home builder (even without paying your Trust Deed) you can’t afford to live in the property then you will need to consider your options. This could be looking into the mortgage to rent scheme or worst case scenario it could result in the sale or repossession of the property if you are unable to sustain your mortgage and home builder payments.

Hopefully this helps to give you something to think about and work on over the coming months.

Please let us know how you get on.

Are you receiving child maintenance from your ex-partner, Aitken711? Whilst I appreciate they are in a trust deed too, maybe they will be able to shoulder some of the extra cost too?

Hi all,

Thanks for your replies. I had word back from the company who now deal with the shared equity on the mortagage and they replied with this:

Good morning Stephanie

Thank you for your email.

The amount required to repay your shared equity mortgage is 25% of the current market value of the property at the time of repayment. If you were to sell the property in good faith on the open market, the sale price would be accepted as the market value.

I note from the below that you do not believe you will be in a position to repay the loan at the date which it matures.

There is a provision within the loan agreement for the term of the loan to be extended by a year from the maturity date. It is important to note that any extension under this clause is strictly at Phoenix Shared Equity’s discretion and the loan can only be extended a maximum of five times.

As the maturity date is over a year away, it is too early for us to start looking at this as an option. If you are still in the same position this time next year, then we can start the application process then.

The first step at that time would be for us to establish the market value of the property. In the first instance we request that you obtain three independent estate agent valuations (the type you do not have to pay for) and submit these into us for the consideration of Phoenix. Usually they will take an average of the three valuations received but these will be reviewed in conjunction with their own in house valuation.

Once the repayment amount has been established, Phoenix will require you to meet with a representative from their Field Agent company to run through an income and expenditure report. Phoenix will also require a copy of your most recent mortgage statement.

Please note that although your husband no longer resides at the property, he is still named on the mortgage and is still jointly liable for the sum due at the end of next year. Therefore, it is unlikely that Phoenix would consider extending the term of the loan without Mr Brown’s full co-operation, which would involve being visited by a field agent himself.

In the meantime, I would recommend you seek independent financial advice if you have not done so already.

I hope the above has answered your query, please let me know if you require any further information.

Kind regards,

Hugo Rivero

Having spoken with the bank re: the mortagage they confirmed they wouldn't allow us to remortgage but would possibly allow us to extend the period it is taken out over so as to lower payments if I began to struggle (my rate ends in January which would allow for this without a credit check,) but now I know we should be able to extend the equity for up to 5 years I feel a bit better. I will leave my ex on the mortgage for now so he is required to pay half and any equity owed in future too. He is willing to pay child maintenance aswell...which is the least he could do in the circumstances.

Thanks.

Steph

Hi Aitken711,

I think it sounds positive that they will consider an extension for the repayment of the loan which will provide you with some breathing space short term which could help for you to clear your Trust Deed and then focus on the homebuilder loan.

You are in the right track thinking about all of this right now.