Being a nurse practitioner means you have a versatile career with A LOT of benefits. Those benefits include many avenues for advancement, very attractive salaries and a meaningful role in helping others. In addition to these, the medical industry, and nurses particularly, have some of the best job security.
Despite all of these incredible benefits, Nurse Practitioners can have their fair share of hurdles when applying for a home loan. Due to flexible schedules, overtime, night shift differentials and other common occurrences for Nurse Practitioners, mortgage lenders can consider these circumstances “unstable” income and/or “complex” financial situations.
Nurse Loan Programs is proud to offer special home loans for nurses and nurse practitioners that take all of this into consideration.
Regardless of who you choose as your mortgage lender, here are some important things to consider:
Overtime. Night differentials. Employment gaps.
All things your mortgage lender is having a hard time with. As a nurse proving your true income and job histories free of employer shifts can be tricky. Because lenders like inside-the-box applicants. The kind that work Monday through Friday with their 9-5 jobs in place, make the same amount each month and never between jobs.
Many nurses look unstable on papers: lenders may be able to see employment gaps, overtime, night shift differentials and more instead of regular and steady income. Added that, travel nurses have even more trouble getting a loan approved. A list of red flags for many lenders is changing employers and employment gaps.
Employment gaps are the norms and not the exceptions. Changing employers? Yep, all the time. And non-taxable income- will the lenders qualify that?
With Nurse loan programs specifically designed for our hard working nurses on the go, nurse practitioners can get approved home loans despite the unique challenges that the nurses and travel nurses face when trying to buy a home. We specialise in providing mortgages to people working in the medical profession and recognize the obstacles they might face. We are used to providing mortgage advice for nurses. We at nurse loan programs will work with you to fully understand what you are looking for and to completely share pictures for prospective lenders. As we work in this ever changing market day after day, we know what lenders are looking for and what information they need.
Why do medical professionals like nurse practitioners struggle to find a suitable mortgage?
There are many reasons why people working in health care sectors especially nurses may have mortgage applications turned down. By understanding what these are Nurse Loan Programs can anticipate them and help you guard against them. Many nurses have flexible work patterns and receive additional payments for overtime and unsocial hours. Most high street lenders fail to understand these irregular hours and payments and want to see evidence of stable income over a long period of time. Similarly, some nurses may work on contractual basis or self employed basis again creating a challenge when you are asked to ‘prove’ your income, particularly if you have gaps in your employment.
Newly qualified nurses can find the nature of their foundation training again makes it difficult to prove income to the lender. You may be working on various rotations, have frequent contractual changes or have to attend training courses which lead you to lose time at work.
Staff nurses will have an easier time securing a mortgage. For one thing, staff nurses will have a base income to present it to lenders, which is seen as a positive thing when it comes to risk assessment. But that doesn’t mean that loan approval is guaranteed by them.
For a full time nurse all of the base pay is considered, but the various other types of pay are only included by them if the nurse has a two year history of receiving this type of pay.
Lenders may or may not take more than your base pay into consideration when they determine how large of a mortgage you can qualify. In other words, they calculate overtime pay differently than they calculate base pay.
Lenders might also not use night shift differential when they calculate how much home loan a nurse practitioner can get- but some might. A night differential refers to a nurse’s pay for work that is performed as regularly scheduled non-overtime hours between 3 p.m. and 8 a.m. A shift differential means that a nurse will get paid more for working nights.
A good mortgage lender will typically view night shift differential pay the same as it does overtime in other occupations. Simply, they will want to see 12 to 24 months of history to consider the income for qualification purposes.
Base Income vs. Actual Income
As mentioned above, a staff nurse can bring the lender a proof of their base income such as an offer letter along with their copy of pay stubs of the last 2-3 months, when applying for a home loan. But in almost all cases, base income does not account for the actual income a nurse brings home.
Nursing wages can be subdivided into several kinds of pay, including shift hours, overtime and shift differential.
Essentially, it all comes down to how the individual lender weighs non-base salary income when determining the loan amount you qualify for. More than likely they will weigh overtime and night differential pay a bit differently than your base pay.
As mentioned above, night differentials are extra pay so it will be up to the lender how to consider those hours when determining whether to approve a nurse practitioner for a home loan and for what amount. Some may see it as high income and some may see it as less consistent income.
Are employment gaps a problem when considering home loans for nurse practitioners?
You might look like a job hopper- particularly if you are a travel nurse. Your contracts may be short in your employment history, perhaps you work per diem or have changed agencies from time to time. All of these scenarios don’t mean that you are a bad employee with trouble maintaining work, but without a context, some lenders might misconstrue your employment gap as negative.
What will help in this kind of situation? Providing as many pay stubs to your lender as possible which will be helpful is calculating qualifying income. Simply request a letter from your employer which explains how your shift differentials and overtime are likely to continue.