Welcome to the forum Nora1304.

There are a number of trust deed firms that charge this £500 sum. Various terms are used to describe it but essentially it's to "protect the equity" in case it were to develop in a home (but only on a home where there is no equity at the start of the trust deed).

The three companies featured on this site, and many others, do not charge this £500 fee but any future equity is still dealt with in the same way (i.e. so long as the trust deed responsibilities are kept the property will not be revalued later).

There's nothing intrinsically "wrong" with charging this fee, though it's very surprising that no mention of it was made to you in advance. It's meant to be paid by a third party rather than yourself.

You'll need to weigh up your perception of the risk that equity will develop in your home during the course of the trust deed term when deciding whether to organise for this amount to be paid over.

Increasing property prices and/or a repayment type mortgage could make this happen. If there were equity at the end of your trust deed you'd need to pay that on top of the monthly contributions you would have already made unless the £500 is paid over before then.

Thank you very much for your quick reply and explanation. I will try and pay this (huge) amount since I am on a repayment mortgage, does it has to be paid before the TD ends? Does it matter if it is paid at the beginning or later in to the TD? Why is it that it should be paid by a third party? Sorry for all my questions...[:I]

Hi Nora1304.

No problem with asking lots of questions, that's what the forum is for.

The point of it being paid by a third party is the assumption that all of your surplus or disposable income is already being paid into your trust deed via your monthly contributions.

Different trust deed providers seem to have different expectations about when and how this should be paid so I think it's a question for you to ask them directly.

Thanks again for your amswer and advice!
I will contact my trustee and ask above questions, this time not letting it go till I have a clear answer after all I have to be able to understand what is expected/asked from me while in this TD it is difficult enough when ones head/mind is split in two...
A: Relieved that something is done about the debt and pressure [:)]
B: Suspicious about all thats going on [}:)]

hi nora130

Hi would agree with e

verything TDA has said. Dont just ask about when the £500 is due, make sure you get it in writing.

Hi All,

Called my trustee and all is clear to me now, thank you all for your advise it has been very helpfull to me!
I am starting to get a feeling that all the doom and gloom will diparture soon from my life and slowely see the sunny side of life again (just wanted to share my feelings) Thanks again! [:D]

Im with one of the three on the site and I was asked to pay the £500 at the start of the trust deed. Just saying ...

Hi Amerififer.

Two of the firms here did previously charge the £500 (as was common at the time) but have changed their position. One never did charge it. We've heard of a number of other firms that have decided to stop in more recent times as well.

ahhh right well i've only been in it for just a year this month so must of been within that time frame. I sure could of used that £500 siggggh..

I can understand Amerififer... as I was writing my reply to your post I knew it would come as cold comfort.

So what happens to the £500 at the end then? 🙂 Do i get it back? One can hope eh? lol

I'm afraid that your creditors will be keenly eyeing up that £500 when the time comes Amerififer!

Aye I thought as much lol 😉