Check If You Qualify

Your guide to getting a mortgage after a Trust Deed

Sharon McDougall - Updated - 25th January 2024 - 4 minutes to read

This article is for individuals in Scotland who have queries about debts or Trust Deeds. We cannot provide mortgage advice.

If you’re about to be discharged from a Trust Deed, you may be wondering to what extent your ability to obtain a mortgage has been affected. It’s a common concern for anyone who has struggled with debt, that they won’t be able to borrow in the future, and the general reluctance of banks to lend is not helping.

The good news is that it’s possible to obtain a mortgage after a Trust Deed, but it will take some time and planning. Once discharged, you’ll need to stick to a strict budget that factors in saving for a deposit, as well as avoid further debt and rebuild your credit rating.

How does a Trust Deed work?

Trust Deeds generally last for four years, during which time you make affordable repayments to the unsecured creditors included in the arrangement. Once the term ends, any remaining debt is written off.

The credit reference agencies are informed of your circumstances, and the Trust Deed appears on your credit file for six years following its inception. While the Trust Deed is in existence you won’t be eligible to borrow at all, and for the six years the Trust Deed is on your credit file your options will be very limited.

Even when the Trust Deed is removed from your credit report, lenders will be unlikely to offer favourable terms. So is there any light at the end of the tunnel? By understanding the criteria lenders apply when assessing risk, avoiding further debt, and saving consistently, you may be able to obtain a mortgage in time.

Debt Calculator

Get a rough indication of what your monthly repayments might be under each of our different debt solutions.

What influences your chances of getting a mortgage?

Saving for a deposit

A higher deposit is one of the biggest factors in your ability to obtain a mortgage because it reduces the lender’s risk. They may offer you lower interest rates and reduced administration fees, as well as providing access to a wider range of options.

Factoring an amount for savings into your budget is crucial if you want to get a mortgage following a Trust Deed – perhaps some of the money that was used to repay creditors each month could be put to one side.

Rebuild your credit rating

‘Credit builder’ credit cards are designed to help people with a poor credit history. Although high interest rates are applied alongside a low credit limit, these cards help to demonstrate you can make repayments consistently.

You’ll need to pay the full balance at the end of each month, so it’s a good idea to use it for a regular payment you know is affordable, rather than smaller amounts that can quickly add up. Failing to repay this type of card will result in heavy penalties, and further long-term damage your credit score.

Check your credit file

There are three main credit reference agencies in the UK – Experian, Equifax, and Callcredit. You can obtain a credit report from any or all of these companies to check the information they hold is up-to-date, but you may find that each one has slightly different information about you.

You should contact your creditors if your file hasn’t already been updated – doing this increases your chances of obtaining borrowing in general, as it’s one of the main reference points when lenders assess your ability to repay.

What is the danger of approaching lenders yourself?

When you apply for borrowing, the lender searches your credit report to establish credit-worthiness. In doing so, a ‘mark’ is left on your credit file and if you are refused by the lender, it can negatively affect your chances with other institutions.

For this reason, it’s a good idea to approach a ‘whole-of-market’ independent local mortgage broker – preferably one recommended by someone whose judgement you trust. You’ll be able to explain your circumstances in person, and gain from the broker’s wide knowledge of products on offer.

They will narrow down your best options, so reducing the chances of your credit file being adversely affected by lender scrutiny and rejections.

It’s also worth knowing that lenders are influenced by the factors surrounding your debt problem. It you can point to a specific event that caused the issue, such as redundancy or illness for example, they may be more open to offering a mortgage once you’ve been discharged from your Trust Deed.

Scotland Debt Solutions works on behalf of Scottish residents, by offering professional guidance and practical assistance to escape the debt spiral. Call one of our five offices in Scotland to arrange an initial appointment free-of-charge.

facebook colour icon twitter colour icon linkedin colour icon messenger colour icon whatsapp colour icon email colour icon
Sharon McDougall Square

Sharon McDougall

Manager

Other Articles

Can I borrow money whilst I’m in a Trust Deed? Can I Borrow Money

Can I borrow money whilst I’m in a Trust Deed?

Borrowing money when you’re already deeply in debt requires careful consideration, and consultation with your trustee, as there are various factors associated with further borrowing in this situatio...

Your guide to getting a mortgage after a Trust Deed Guide to get a mortgage

Your guide to getting a mortgage after a Trust Deed

If you’re about to be discharged from a Trust Deed, you may be wondering to what extent your ability to obtain a mortgage has been affected.

What is an inhibition court order in Scotland? Court Order

What is an inhibition court order in Scotland?

If you’ve lost your job, state benefits and tax credits can provide vital financial support to see you through this tough time and help you avoid taking on too much debt while you look for more work...

About

Why Choose Us

Usp Discussion

Speak Direct With

A Qualified Adviser

Headset

We Don't Operate

Call Centres

Usp Location

5 Offices in Scotland

National Coverage

Usp House

Ask us About

Home Visits

Usp Award

Fully Regulated Advisors

From a Reputable Firm

Usp Hand Heart

Helping Scots Get

Out of Debt Since 1989

We'll give you a call

Our Scottish based team can help advise you on your debt problems.

Here at Scotland Debt Solutions we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See our Privacy Policy.

Tools

Useful Tools

Personalised Debt Report
Usp Planner

Personalised Debt Report

Our personalised debt report will help you better understand your financial position and see where your money is going.

Debt Report
Instant Scheduled Call & WhatsApp
Headset

Instant Scheduled Call & WhatsApp

Arrange a call with an expert advisor at a time to suit you or contact our team via WhatsApp for immediate help and advice.

Arrange Callback
Find a Local Office
Usp Signpost

Find a Local Office

We have five offices located across Scotland. Find your nearest one here.

Find an Office

OUR SERVICES

We can help you with...

Sequestration

Sequestration

Sequestration is the Scottish version of bankruptcy and may be suitable for you if you do not have the money to pay back your debts

Find out More
Trust Deeds in Scotland

Trust Deeds in Scotland

A Trust Deed involves making a monthly contribution to your debts for up to four years. After this time any remaining debt included in the Trust Deed will not need to be paid.

Find out More
Debt Arrangement Scheme (DAS)

Debt Arrangement Scheme (DAS)

A Debt Arrangement Scheme (DAS) lets you pay off your debt through a series of manageable instalments over a reasonable length of time.

Find out More
Business Debts
Icon Briefcase

Business Debts

Whether you are a sole trader or a limited company director, we can help you work through your current financial problems including money owed to HMRC

Business Debts

Our Insolvency Practitioners are regulated by ICAS or the IPA and our firm is authorised and regulated by the Financial Conduct Authority

Fees and Information: There are fees associated with our services. These will be fully explained before entering into any of the personal debt solutions referred to on this website. Full details of our fees and how these are charged are fully explained to you prior to you committing to any particular service.

ICAS Insolvency Practitioners