Mortgage Tips For Couple's Starting A Family

July 22, 2010 - PRLog -- Smartline Personal Mortgage Advisers Managing Director, Chris Acret, advises parents-to-be to make decisions about how they will use paid maternity leave, annual and long service leave, and one-off payments – such as the baby bonus – so they can put a plan in place as early as possible.

“Having a baby is one of the most wonderful experiences in life, but it can also be stressful,” Mr Acret said.

“You don’t want to be worrying about how you’re going to juggle your finances once the baby arrives. The time to start planning is when you decide to become, or find out that you are going to be, a parent.”

While there are a number of options on offer by lending institutions, Mr Acret said that seeking advice was important in assisting homeowners find solutions for their unique circumstances.

“Not all of the options on offer by lenders will work for you – and they do vary considerably from bank to bank, so you need to do your homework,” he said.

“A prime example is payment honeymoons – or holidays – which are available to some borrowers, depending on the loan type."

"For those who do have the option, generally speaking, access is dependent upon the amount of prepaid funds you have accrued."

“For example, if you’ve been paying extra into your loan for a while and accrued $20,000 in your redraw facility, it is these accrued funds that will fund your payment holiday."

“Once these funds have been exhausted, the payment honeymoon is over.”

Switching to interest-only repayments could be another option.

“While some borrowers may be able to switch to interest-only repayments, it’s important to remember that the loan is still expected to be paid out in (usually) 30 years. So if you are not paying any principal for a while, this will have an impact on your minimum repayments when you revert back to principal and interest,” Mr Acret said.

“This will be an important factor in your decision to use this tool."

“Another essential consideration is whether to fix or not.  Factors that will effect your decision include the length of time you’ll be on one income, the income amount, and whether or not you have ongoing additional expenses, such as a car loan or medical costs."

“Taking time to weigh up the pros and cons, making the best use of one-off payments and considering your unique circumstances are all key to developing a plan that will ease the financial burden and, in turn, help you to enjoy your time with your new baby.”

Smartline’s mortgage tips for couples intending to start a family:

   * Make extra loan repayments before you plan on having children.
   * Be aware of all one-off and Government family assistance payments that are available to you.
   * Take advantage of all leave types: holiday, maternity and long-service leave.
   * Begin planning as soon as possible.
   * Seek advice.

For more information of finding the right loan and exploring your home loan options when starting a family contact your local mortgage broker.

Visit Smartline for free advice: http://www.smartline.com.au

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About Smartline: Established in 1999, Smartline is a multi award winning franchised mortgage broking group. The group’s 200 franchisees have assisted over 100,000 Australians arrange their home finance to date.

We are full members of the Mortgage and Finance Association of Australia (MFAA). As a contribution to our community, we donate $10 to charity for every home loan we complete and are delighted to have donated over $400,000 to date.

Smartline's Managing Director is Chris Acret; its Executive Director is Joe Sirianni; non executive directors are Neil Pinner and Michael Brennan.