Mortgage Broker Cotham

To credit agencies, a person who has taken up all available credit can look overextended financially.

This can negatively affect a credit rating as the person will be regarded as statistically more likely to miss payments or make them late.

With family deposit mortgages, a family member places cash in a linked special savings account to help another family member secure a mortgage to buy a home and where the money in the account is held as security against the mortgage not being paid off.

The cash is held for a fixed period of time, which can be quite long (many years). The risk is that the mortgagor defaults on repayments so the helper family member's money is at risk. However, savings interest is payable on the linked account, even if at a comparatively low rate, and if the correct repayments are made, there's no other cost to the helper family member.