Big life changes or milestones often prompt a review of finances, especially home loans. Having a baby, a couple going from two incomes to one or vice versa, wanting to renovate or upgrade a home, job loss, a promotion or illness can all be reasons to refinance. With some life changes, you can plan ahead which will make it easier, other life changes are unexpected and you will need to work with the options you have at the time.
Pregnancy or children
If you are planning a baby, are in the early stages of your pregnancy or looking to adopt or foster children, it can be a great time to review your mortgage to ensure you are getting the right interest rate and have the features you need. Will you or your partner, if you have one, be taking time off when the baby arrives? How long will you or they be off work? How much can you manage with repayments on your mortgage? Do you want the capacity to reduce or pause payments?
All these questions and more can come up when you are pregnant or planning for a baby. It is often easier to refinance and plan these things ahead of time, instead of trying to refinance when once the baby is here.
Going from two incomes to one
Children aren’t the only reason a household might drop from two incomes to one. Illness, planned time off, retraining, going to university or changing careers are just some of the many reasons one might lose or reduce their income. If you are planning a career change, going back to school or know ahead of time you want to take time off, you can review your home loan and if needed refinance to allow you a buffer to take this time off or reduce your repayments.
Increasing to two incomes or getting a promotion
An increase in income is a great time to refinance, look for better options and pay extra off your mortgage, if you want to. With a higher income you might have other loan options available or might want to look at refinancing to invest. Discuss options with a financial professional and discuss your loan needs with a broker.
Job loss or illness
Job loss and severe illnesses aren’t usually planned or able to be planned for. When it happens, you can discuss your needs with a broker and depending on your personal circumstances, you might need to refinance or it might be in your interests to refinance your mortgage to a more flexible option while you look for work or receive medical treatment.
Where possible, if you can plan ahead for these life changes, discuss your future needs and goals with your broker and refinance before these changes take place, it can be easier to get the right home loan for your needs. If the life changes are unexpected, it is still a great time to discuss your options with a broker. You might not be able to make changes or you might already have the right option for your needs, but it’s better to know your options sooner rather than later.
To discuss your home loan needs, contact your local broker here.
This article is not to be taken as financial advice. Every applicant’s personal situation will vary. We recommend seeking professional advice for your circumstances. All loans are subject to the normal lending criteria.