Income Verification Is Important
Mortgage lenders typically need two years of verifiable income to approve your mortgage loan. This can be a barrier for traveling nurses or first time homebuyer nurses, but theres no reason to get discouraged. Just be sure to track when you worked, moved, and the days and weeks in between jobs. Keeping accurate records and contact information from previous jobs can help speed the lending process along. If you travel often, consider shortening your gaps to less than one month when possible. When your gaps are shorter than one month, it doesnt raise red flags for lenders.
Not everyone is willing or able to work a staff nursing job for two years before buying a home. If this describes you, do your best to provide the bank with 24 months of successful employment, preferably in nursing. That way you can give them your average monthly income over a two-year period. Make sure to add a letter of explanation of any gaps to improve your chances of securing a loan.
Get Your Finances In Order
It takes money to own a home. The upfront fees and down payment are one thing, but once youve moved in, youre also responsible for maintenance and repairs, property taxes, homeowners insurance, and other house-related costs. Saving up as much money as possible beforehand will help you be prepared for all of the expenses associated with buying and owning a home.
Create a budget to help prioritize setting money aside for closing costs, the down payment, and an emergency fund. Getting your finances in order by paying down debt will boost your credit score, which will improve your chances of getting approved for a mortgage and help you secure a better interest rate.
Managing Sudden Expenses And Preparing For Events
Personal loans can also be used to pay for sudden, large expenditures.
For instance, if you need to make financial arrangements for home repair or home improvement, then you can get a personal loan to manage these expenses.
Nurses can also use personal loans to buy expensive home appliances that cannot be purchased with a credit card.
Another reason to apply for a personal loan is if youre celebrating a significant event. For instance, if youre getting married and need more money to have the wedding you always dreamt of, then you can get a personal loan.
Personal loans can also be used to manage events, such as moving to a new state or city and starting afresh.
Don’t Miss: Bsn Nursing Programs In Colorado
How To Get A Mortgage For Travel Nurses
Overtime. Night shift differential. Employment gaps. These are all things your mortgage lender may have a hard time with. As a travel nurse, employment gaps are the norm, and proving your true income to a mortgage lender can be tricky.
Lenders tend to like inside-the-box applicants: the kind that work nine to five, make the same amount each month, and are never between jobs. But thats just not a reality for the typical travel nurse and thats okay.
Its possible to get approved for a mortgage despite the unique challenges that travel nurses face when trying to buy a home. Here are some special mortgages for travel nurses and strategies you can use to get your application approved.
In this article
This article was created in collaboration with former travel nurse recruitment manager and current content and social media director at Nurse.org, Angelina Gibson.
How Nurses Can Qualify For An Fha Loan
Nurses work in a field that is in high demand and they are usually able to find a job no matter where they prefer to live. Therefore, when lenders evaluate a loan application from a nurse, some weight is placed on the stability of the job and the likelihood that the nurse will have steady employment.
Basic FHA Requirements for Nurses:
- 2-Year Work History FHA loans require applicants to have been working full time for the past two years. However, exceptions can be made if there is a gap in the two year work history.
- Down Payment The minimum down payment for an FHA loan is 3.5% for credit scores of 580 or higher. However, if the credit scores are between 500-579 then the down payment will be 10%
- FHA guidelines permit credit scores as low as 500. However, most lenders do not accept scores that low.
- Debt to Income Ratio Some lenders in our network will allow for DTI ratios as high as 56%. This will enable nurses to stretch their buying power and potentially can afford more than if they were to apply for a conventional loan.
- These are just some of the basic requirements to qualify for an FHA loan. If you believe you can meet these requirements, then for a pre-approval.
You May Like: Nightingale School Of Nursing Acceptance Rate
Getting A Home Loan As A Traveling Nurse
While getting a home loan can be grueling for most staff nurses, it is even more challenging for traveling nurses since mortgage lenders generally view their unstable income, employment gaps, and student loans as liabilities. Consequently, most lenders consider traveling nurses as “undesirable” applicants.
However, this doesn’t mean you’re locked out of securing mortgages as a traveling nurse. Here are some of how you can circumvent the hurdles mentioned above and qualify for home financing.
What Can You Save When Buying A Home Through Loans For Oregon Heroes
- Our clients lock in rates that average 0.25% better than the national average*
- We charge no Admin or Processing fees
- $3,500 earnest money guarantee **
- 3% of company compensation from the home loan will be donated to a local charity. You can choose from the following: Local Adopted School, Gary Sinise Foundation First Responders, or the Wounded Warriors Project.
- Free 1 year home warranty ***
You May Like: Is Nursing School For Me
Is A House A Waste Of Money As A Travel Nurse
One concern travel nurses have is what they will do with the home while you are gone on travel nurse assignments.
Why pay all that money when youre not there?
One option is that you can break even or even make money by using your home as a short-term rental while you are gone.
Related: Can Airbnb wreck your refinance?
Or get a roommate who is there all the time. These practices are allowed by mortgage rule-making agencies, to some extent. Just remember that you have to actually move into the home, and live there while you are not traveling.
Mortgage rules say you have to move into a home within 60 days of buying it. So, make sure you can do that even if you have some extended contracts coming up.
If you plan to set up some short-term rentals, get familiar with Airbnb and hire a property management company. You dont want to be handling booking and other details while working 12-hour shifts a few states away.
Many companies will manage your property for 10-20% of your rental fee. There are plenty of companies to choose from, but do your homework before selecting one. Make sure they provide the services you need and arent too expensive. Check out Airdnas list of recommended management companies.
Dont want to have random strangers in your fresh new home? Thats understandable.
Simply put up an ad in a travel nursing forum or Facebook group, and only rent to fellow travel nurses who will be in your area.
Student Loan Planner Disclosures
Upon disbursement of a qualifying loan, the borrower must notify Student Loan Planner® that a qualifying loan was refinanced through the site, as the lender does not share the names or contact information of borrowers. Borrowers must complete the Refinance Bonus Request form to claim a bonus offer. Student Loan Planner® will confirm loan eligibility and, upon confirmation of a qualifying refinance, will send via email a $500 e-gift card within 14 business days following the last day of the month in which the qualifying loan was confirmed eligible by Student Loan Planner®. If a borrower does not claim the Student Loan Planner® bonus within six months of the loan disbursement, the borrower forfeits their right to claim said bonus. The bonus amount will depend on the total loan amount disbursed. This offer is not valid for borrowers who have previously received a bonus from Student Loan Planner®.
Also Check: How Long Does It Take To Become A Nurse Rn
Special Housing Programs For Nurses
Many nurses wonder if there are special programs specifically for RNs. They may have heard of doctor loans and wonder if there are similar financing options for nurses.
Grants for nurses buying a home – be weary
There are few nationwide programs specifically for nurses, and no government-sponsored programs. There are a few that claim to be housing grants for nurses, such as teachernextdoor.us. However, further investigation reveals that this site is run by Pipeline ROI, a lead generation company.
Another website, usehhaf.org, claims to offer grants to nurses and professionals in order to build solid communities. However, it claims to be a fund of The Virtual Sports Academy, an organization whose website was shut down at the time of this writing.
The point of these examples is to be careful when looking for home loans for nurses. There are many disreputable companies looking to take advantage of nurses.
Plus, many programs claim to offer grants that could actually be down payment assistance. Conventional and FHA loans allow down payment assistance from certain approved organizations, and many of these companies are probably not on the list.
Home loans for nurses
In our research, we did find one example of a nurse mortgage, from Seattle-based Salal Credit Union. It offers:
- Down payments as low as 10%
- No monthly mortgage insurance
- Down payment and closing cost funds can be gifted
- Adjustable rates with several term options
Standard loan programs that nurses can use
How Much Money Can You Borrow
The amount of money you can borrow in a personal loan depends on several factors. Typically a lender will evaluate things like your earnings, your credit score as well as other debts on your credit profile.
The general rule is that your income and credit score will be directly proportional to the amount of money you can borrow.
In most cases, a personal loan can allow you to borrow an estimated amount of money, starting from around US$1,000. This can go up to US$50,000 .
If youre borrowing money from a bank, then depending on their loan policies, they may place a cap on how much money youre allowed to borrow.
These policies may not be related to your creditworthiness as a borrower and might be introduced by the bank to safeguard itself against defaulters. This specifically applies to unsecured personal loans, where you cannot provide collateral as security against the loan amount.
Recommended Reading: Hondros College Of Nursing Reviews
Requirements For First Time Homebuyer Assistance
Those who meet the following conditions qualify as first-time homebuyers, according to the U.S. Department of Housing and Urban Development :
- An individual with no ownership in a primary residence for exactly three years prior to the date of purchase of the new property, or someone with a spouse who meets this criterion
- An individual who only owned with a former spouse during marriage, but is now a single parent.
- A person who had only owned with a former spouse and is now considered a displaced homemaker.
- A person who has only owned nonpermanently fixed foundation residences .
- An individual who has only owned a property that could not meet state, local, or model building codes. The property in question also must be deemed unable to be brought into compliance for less than the cost of constructing a permanent structure.
There are also homeownership assistance programs with qualification requirements that differ from some of the government programs standards. For example, nonprofit programs are available for qualified homebuyers in certain public service jobs. Below, weve outlined the most common types of financial aid programs that first-time homebuyers should know about. We also recommend checking with your state and local housing departments, HUD-approved housing counseling agencies, and your real estate agent or mortgage lender to see whats available in your area.
Will Banks Consider Second Job Income
Yes! Some banks recognise that most essential services workers do shift work and have a second job to supplement their income.
Generally speaking:
- The second job needs to be in the same line of work, so working as an aged care worker or a first aid trainer/assessor on the side will typically be acceptable.
- Your income may be shaded by between 50-80%.
- Some lenders will accept 100% of your income if you can show that you have a 6-12 month work history with your second employer and have been earning a regular income.
- Some lenders will consider less than 3 months work history if youre in a strong financial position with a clear credit history.
Recommended Reading: Nursing Schools In Clearwater Florida
Fha Loan For Registered Nurses
FHA Loans are government-backed loans, issued by the Federal Housing Administration. A government-backed loan means that the home will go under government control if the borrower can not pay their mortgage. If the house goes into forbearance, the government will pay the bank bank for the rest of the loan, and then take ownership of the home. This applies for all the remaining types of loan well cover, which are all government-backed.
FHA loans help increase homeownership by reducing credit score requirements for mortgages. Registered nurses and others with lower credit scores also can qualify for these mortgages, thanks to Mortgage Insurance Premiums and the Upfront Funding Fee. Their low down payment requirement is also an attractive benefit of these loans. FHA loans are popular with many first-time home buyers for these reasons.
How Much Deposit Do I Need
If youre buying a home, youll need to have at least 5% of the purchase price of the house as a deposit.
This means that for a $400,000 purchase, youll need a deposit of at least $20,000.
Aside from that, you may need an additional 5% of the purchase price to cover your purchasing costs. These mainly include government fees such as stamp duty and other costs like conveyancing fees and LMI.
The purchasing costs calculator can give you a reliable estimate of the costs of buying a property.
However, if you dont have a sufficient deposit, there arelow deposit as well as no deposit home loan solutions.
You May Like: Ballenger Creek Center Nursing Home
Overcoming Home Buying Challenges
Nurses face some unique challenges when applying for mortgages. Lenders must verify eligibility requirements, including income and creditworthiness. The problem is many mortgage lenders do not understand how nursing works and they deny nurses access to the financial resources needed to buy homes. Here are some of the most common home-buying challenges nurses face and what they can do about them.
Traveling nurse income has mystified traditional mortgage lenders for years. Financial institutions like to review prospective borrowers average gross pay history to determine whether they are financially stable. Traveling nurses can go from working very few hours to exceeding full time. This confuses lenders and often leads them to deny these kinds of mortgage applications. One possible solution is to have the current employer write a letter verifying current employment conditions, including if they are long-term.
Student debt is another variable that can play into a mortgage lenders denial of your application. Nurses who wish to advance their careers require higher levels of education. As any nurse can tell you, paying for nursing school isnt cheap. Mortgage lenders can look at student debt as a risk factor they are unwilling to ignore. Working with one of the loan specialty programs mentioned earlier in this blog is an excellent way to come up with solutions that drive down debt-to-income ratio and increase chances of qualifying for a traditional mortgage.
Usda Home Loans For Nurses
USDA home loans do not require a down payment, so you can instantly save on a home purchase using this type of loan. These home loans are designed for people living in or moving to rural areas. The USDA recognizes towns and cities up to 35,000 people as rural, meaning you dont necessarily need to live on a farm in the country. There are more requirements to meet for this type of government-backed loan, but there are many benefits if you qualify. One of the main qualifications for a USDA loan are the income guidelines, set by the USDA.
First, there is no down payment requirement because the loan amount you can request can be 100% of the home purchase price. Second, there is technically no minimum credit requirement, although a credit score of 640 or better is more favorable. Lastly, you can use a USDA loan to build a new home in a rural area, you do not need to use it on an existing home.
Don’t Miss: Hope Nursing School In Florida
How Nurses Can Prepare For A Home Mortgage Application
New homebuyers can prepare for a mortgage application by having the appropriate documents and information ready.
If youre hoping to use overtime to justify a larger mortgage, you may be asked to show a few years worth of income to demonstrate consistency. Most lenders will ask for a twelve to twenty-four months of pay history. This means having both pay stubs and W-2s ready.
However, even if you just started your first job out of nursing school, you can still use your base pay to qualify for a mortgage. Most lenders require you to be in a field for two years before you can qualify for a mortgage, but some lenders consider nursing school as part of your work history. This does mean a smaller mortgage than waiting two years and using your overtime pay to demonstrate actual income.
See how you can calculate your down payment options using our calculator here:
Existing debt, such as any remaining student loans can also impact a loan application. The easiest way to prepare is to calculate your debt-to-income ratio or DTI. This is the percentage of your gross monthly income that goes toward debt.
For example, if you make $6,000 a month and your student loan payments are $1,200 a month, with no other debts, your DTI is 20%.
43% is usually the max for taking out a mortgage and most lenders prefer to keep DTI under 36%. To get an estimate of your DTI ratio, use our simple DTI calculator here.
To learn more about mortgage lending options with Laurel Road, .