Hi SkintMink

I am sure that if you contacted the IP or his staff they would clarify the position as to why the "nominal sum of £500" has been included as part of your Trust Deed proposal.

Chris

Hello SkintMink.

Valuations for trust deeds tend to be at the lower end of the scale. I wouldn't worry about this side of things, it's good news for you as there should be no equity responsibility in addition to your monthly contributions.

The £500 is, I'd imagine, to ensure that the property is not revalued towards the end of the trust deed when there might be equity there and you'd have to find a way to pay it over.

Plenty of trust deed firms will do the same thing without charging this £500 (or £750, or £1000) including, we are told by Mark, Kevin, Shona and Chris, those featured on this site. It's therefore a shame that this amount is being requested from you. That doesn't mean that charging this £500 is in any way "dodgy" though, a number of respectable firms do so.

Normally this amount would have to be paid by a third party rather than you.

Thanks guys for the prompt reply. I did call the IP and their staff were very nice and just said 'don't worry if you can't raise the money, we will add this to the TD and it would mean extending the TD by a month' They also said that is is actually beneficial to me to have negative equity. To be honest I'm a bit lost with the whole property thing. Happy to know that it's not 'dodgy', so will add it to the TD I guess and extend by a month. Thanks again

They really should have told you about this extra payment in advance. Probably best to pay it at some point though now that you have signed the trust deed, as if you didn't then it could cause problems

I know things are changing all the time.. When i took my trust deed out in Sept 2010 I was required to pay the £500 up front for the very reason you stated. My property was and probably still is in negative equity. I am with one of the three represented here and was told that things changed after i took mine out.. Sure could of used that £500 for other things but hey ho.. lol
Ooops should of added that i was indeed told about it up front 🙂

Many firms requested £500 for properties with little or no equity. Although many firms have now stopped this policy,it was there to prevent the property being valued at a later stage, and to renounce the trustee' s interest in your property. I am sorry you had to pay this amerififer, but at least you were told up front, and that was obviously the policy of your trustee at that time.
Skintmimk, this is the one time you want negative equity, as it makes your house much safer. There is nothing dodgy about the £500 , and it will secure your house - but you should have been told upfront.