Skip to main content
Phone Icon Call free today: 0800 043 1320

Write off debts you can't afford

Find out if you're eligible now.

Please tell us the total sum of your debt
When considering your debt level remember to include the following commonly missed debts: HMRC,Rent arrears, Bailiff inforcements and council Tax.
Less than £6,000
£6,000 - £20,000
More than £25,000
How many people do you owe money to?
Notifying of this will allow us to tailor our advice to ensure you receive individual support.
Less than 2
2 or more
What type of property do you live in?
Discussing your living arrangements is important to ensure we provide appropriate advice and allows us to work to ensure your property is not at risk.
Owned
Rented
Private Rented
Living with Parents
Where do you live?
Telling us your location allows us to offer information about the debt solutions and help available in your area.
Scotland
England
Wales
Northern Ireland

31/10/2018

Can I Get A Mortgage With A Trust Deed?

SHARE

Many people who owe money in unsecured debts worry that they won’t be trusted by credit reference agencies in future, which could impact their ability to borrow money.

 

Many people who owe money in unsecured debts worry that they won’t be trusted by credit reference agencies in future, which could impact their ability to borrow money.

In particular, it’s a common concern for people entering into debt solutions like Trust Deeds or the Debt Arrangement Scheme that they may struggle to get a mortgage during or after their arrangement.

In this article, we’ll discuss how debt solutions like the Scottish trust deed can impact your credit report, how long your credit file will be affected, and how to rebuild your credit rating to enable you to get a mortgage or access other secured loans in future.

Why choose Carrington Dean?

  • Write off unsecured debts over £5,000.
  • Stop interest and charges soaring.
  • Reduced payments from £85 per month.

How will a Trust Deed affect your chances of getting mortgage?

A Scottish Trust Deed is the most popular debt solution available in the country, and allows people to repay money owed by turning unsecured debt into a series of affordable monthly payments.

Managed by a licensed debt professional known as an Insolvency Practitioner, Trust Deeds usually last up to four years, after which your unaffordable debt will be written off and you should be able to move on from serious debt problems.

That said, a Trust Deed will stay on your credit file for 6 years after the day it becomes protected. This means mortgage lenders may be wary of lending to you.

Getting a mortgage after a Trust Deed

Getting a mortgage while your protected Trust Deed is ongoing can be extremely difficult as you can’t access new credit or loan valued at more than £500 without the permission of your insolvency practitioners.

It is possible to get accepted for a mortgage after your Trust Deed ends, however, your options may be limited and you will most likely face high-interest rates.

Once you have been discharged from your Trust Deed you will need to rebuild your credit score. You will need to be careful to avoid further debt, as well as sticking to a strict budget that will allow you to save enough money for a deposit.

How we helped Yvonne

“I never thought I’d be in this situation in a million years but knowing that I had somewhere to turn for support and the arrangement has been an absolute life saver. It has made a huge difference to our financial situation."

Yvonne, Wishaw

Get help like Yvonne did

Increase your chances of getting a mortgage

Rebuild credit rating

After being discharged from your Trust Deed it may be an idea to take out a credit builder credit card, which are designed to help those with a poor credit history build their credit back up. It is important to note although these cards will have high-interest rates and a low credit limit – they prove your ability to make repayments consistently.

The best way to use these type of cards to avoid falling back into debt and further harming your credit score is to use it for a regular payment you know is affordable as you need to pay the full balance each month.

Save for a deposit

As your credit rating will be affected for some time even after your Trust Deed has ended this gives you time to save for a substantial deposit, this may increase your chances of getting a mortgage as the less you need to borrow the less risk the lender has.

Continue on the same – or a similar budget that you followed whilst in your Trust Deed and put the extra money into a savings account – if you have never owned a home before you should open a Help to Buy ISA and save any money for your deposit in here.

With a Help to Buy ISA, the government will ‘top-up’ whatever you have saved by 25%. The maximum you can receive from the government is £3,000.

Be proactive on poor credit history

Once your Trust Deed has been discharged you should obtain a credit report from a credit agency such as Experian or Equifax to ensure your file is up-to-date to reflect you Trust Deed. Don’t just assume that it will automatically update once you finish your Trust Deed.

You should contact your creditors right away if your file hasn’t been updated, as when you apply for a mortgage, lenders will use this as one of the main points of reference to judge your ability to keep up payments.

Get a mortgage broker

When applying for a mortgage most people go it alone and approach their local high street banks. However, banks tend to be risk-averse and if you have previously been in a Trust Deed will most likely see you as high risk and not lend to you – or offer very high rates.

An independent mortgage broker may be a better option. They will have access to a wide variety of other lenders on the market who may be more flexible in their outlook to who they will lend to.

It is important you inform your mortgage broker about you Trust Deed when you first approach them as it will appear on your credit file when you apply for a mortgage so it is important to be upfront about it.

Explain the factors surrounding your financial difficulties, as some mortgage brokers may be more open to offering you a mortgage if they know the reasons behind your financial troubles.

You could write off up to 70% of your unsecured debt today

Latest Articles

12/08/2020

Can you get a CCJ in Scotland?

When a company you owe money to pursues you for a debt in England, Northern Ireland or Wales, a common course of acti­­on is for them to apply to the courts to impose a CCJ, ...

12/02/2020

What is a Scottish Decree?

When you’re struggling with debts, you may have come across a decree, and it’s something we’re asked about often. That’s why we thought we’d shed some light on the things you need to know about ...

01/10/2019

What is a Moratorium?

Are you thinking of applying for a debt solution such as a Trust Deed or Debt Arrangement Scheme (DAS), but need more time to mull it over and are worried about what your creditors are ...