Starting a family is a very exciting time in your life. It’s also a time when you start thinking about upgrading your home. But can it be done on a reduced income when your partner takes maternity leave? In this post, we address this important question and hope to provide you with some advice to help you answer it.
The loan term matters
When you take on a mortgage, the bank don’t expect you to repay it back quickly. It’s not really in their best interest if you do! That’s why they offer you a 30 year loan term.
Thirty years is a long time. Consider all the things that will happen to you over that period. We guarantee you will experience all sorts of significant changes and starting a family (and the resulting reduced income) is just one of them.
A longer-term approach
Making a decision to extend your current home or upgrade to a new one shouldn’t be based solely upon a one or two year period when your partner is not working. A wiser move is to look further than that.
Sit down and discuss what your situation might look like post-maternity leave beyond the first few years. Consider reduced work hours, reduced income and who’s going to look after the kids if your partner goes back to work. Think about the change in expenses too when you go from being a double-income-no-kids unit to one with a young family.
After these discussions, you’ll have a good feel about what you can and can’t afford post-maternity leave. You can then start to consider your upgrading options: whether to purchase a new property or even extend your current one.
This is when a mortgage broker can be of most benefit. It’s our job to help you see into the future and help you forecast and budget for big life events such as upgrading your lifestyle. Ready for some help? Then contact us for an obligation-free chat.