Is there a special mortgage deal for nurses similar to doctor home loans? The answer is an unfortunate no, but there are other options where you can get an exclusive nurse home loan with additional benefits.
Nurses and registered nurses can still be eligible from a waived LMI (Lenders Mortgage Insurance) home loan, discounted interest rates and other benefits. Let’s learn more about how you can secure such special deals and save thousands of dollars in the process.
Are nurses offered home loan discounts?
Nurses are usually in the good books of lenders and non-lenders. It is because nurses perform an essential service and have a reputation as low-risk borrowers.
Nurses can get home loan savings, similar to doctors and other medical professionals. You may be allowed to waive LMI when you borrow up to 85% of the value of the property. You may also qualify for lower interest rates if you borrow more than $250,000 or have applied for a professional package.
Lenders Mortgage Insurance or LMI, is an insurance fee applicable when you are borrowing more than 80% of the value of the property. Lenders charge this fee for bearing a high risk, and it protects them in case you default on your home loan.
In addition, other incentives, such as extra interest rate savings and waived fees, may be included in some professional packages for nurses.
We, at AirBroker, help you obtain the following benefits for a nurse home loan:
- Get access to the best deals and lenders who understand your industry
- Save time and money by managing paperwork
- Gain access to hundreds of loan products with a single point of contact
- Obtain hassle-free finance
- Get access to a fixed offset account.
- Oversee the entire procedure from start to finish
How much can Nurses borrow?
Nurses may also be able to borrow up to 95% of the purchase price of a property. They should have a strong credit history, stable employment with a high income, regular debt payments, and are not purchasing a unique property or in a remote location.
Income Considered
Besides the normal base income of nurses, they earn incomes in other forms. Will lenders accept this income while assessing your other types of income? Let’s find out!
Second job income
Some lenders consider your income from the second work. They recognise that most essential services workers like nurses do shift work and have a secondary job to supplement their income. Banks usually consider:
- Working as an elderly care worker or a first aid trainer/assessor on the side is usually permitted if the second job is in the same line of work.
- Some banks take 100% of your income if you can demonstrate a 6-12 month work history with your second employer and a consistent income.
- If you have a stable financial situation and a clean credit history, some lenders will consider less than three months of job experience.
Overtime income
Nurses are essential service workers, so some banks accept all of your overtime income. For other regular borrowers, lenders may consider only 50-80% of the overtime income when calculating the borrowing capacity in a loan application.
You will need to provide:
- Your two most recent payslips
- Your most recent PAYG group certificate.
- An employment letter from your employer stating that you have been getting overtime pay regularly
Fringe benefits
Many nurses obtain a part of their income from fringe benefits, such as paid vacation, meal allowance, and employee allowance as non-taxable income. This money is usually deposited directly into your bank account or withdrawn from your paycheck to pay off a debt, such as a car loan or a mortgage.
Lenders frequently make the mistake of classifying fringe benefits as taxable income, which can significantly lower the amount you are entitled to borrow. Fortunately, some consider this to be tax-free income.
Is LMI waived for Nurses?
Banks do not directly waive lenders’ mortgage insurance because you are a nurse. However, you will likely be eligible for an LMI waiver when borrowing up to 85% of the purchase price since you work in a low-risk profession.
You will also need to meet the following lender requirements:
- You must not borrow more than 85 per cent of the LVR (Loan to Value Ratio)
- The loan amount is limited to $1.5 million
- There are no negative records in your credit file
- You have a strong income – banks prefer borrowers with a yearly income of more than $150,000
- You have a stable employment
- Some lenders may even allow refinancing your existing property to purchase a new home.
Income Accessibility of Nurses
For most home loan applicants, lenders consider their normal base salary while calculating their borrowing power. They typically shade or ignore allowances, overtime or secondary income.
However, some recognise that overtime income, fringe benefit income, and second incomes are prevalent for nurses and are part of the industry.
The same goes for nurses on probation. Even if you are on probation, you may be able to obtain a home loan. Nevertheless, you need to provide proof of consistent income when applying for a home loan.
In general, what you may require is determined by the lender. Make sure you work with an experience mortgage broker who has relationships with lenders that understand and accept these types of additional incomes for nurses.
Eligibility Criteria of Nurses
In order to obtain loan deals with special rates and terms on your nurse home loan application, you need to meet the following criteria.
Professional Associations
Lenders may ask you to provide evidence of your membership in a specific nursing association.
- Membership in the Nursing and Midwifery Board of Australia (NMBA), which comprises categories for Working, Student, and Associate members.
- AHPRA (Australian Health Practitioner Regulation Agency) registration is required.
Qualification of Nurses
To qualify, you must be employed in one of the following positions:
- Nurse
- Enrolled Nurse
- Registered Nurse
- Midwife
- Nurse Educator and Researcher
- Nurse Manager
- Nursing Support and Personal Care Worker
- Student nurses may also qualify as they require on-the-job training.
With experience and long-term industry knowledge, our brokers at AirBroker are aware of potential issues with your home loan application. They know ways of reducing them when applying to a specific bank or a lender.
We have a variety of lenders and non-lenders on our panel, and our mortgage brokers are adept in their credit policies. Applying to a bank that knows all these and accepts multiple incomes of a nurse is the key, and we will do exactly do that – apply with the right bank.
What if I don’t meet the criteria?
You could enter the property market as a regular borrower even if you are unable to obtain a nurse mortgage.
Generally, you need to adhere to the following to get a home loan as a nurse:
- Be currently working as a nurse
- Been with your current employer for one year or worked as a nurse for at least two years
- Possess a clean credit file (credit history) free from defaults, bankruptcies etc.
- 5% genuine savings
- Sufficient deposit – at least 15% plus stamp duty and purchasing costs
- Should be in a sound financial position and meet general lender credit policy
If you have issues with any factors listed, you can take time and make amendments until your record gets better to apply for a home loan.
Consideration
Professional Packages for Nurses
Most banks will provide you with a larger interest discount in your professional package for nurse home loans. Professional packages include a single annual price ranging from $300 to $750.
Before you choose a professional package, compare its annual charge to the total fees you would wind up paying if you used the different products separately.
Buying an Investment property
If you want to buy more than your first house, such as an investment property, nurses may be able to acquire similar favourable conditions from some lenders.
What if I don’t want to pay LMI altogether?
You do not have to pay any mortgage insurance if you borrow 80% of the purchase price or lower from the bank.
If you presently have a 15% deposit, saving a little extra to reach a 20% deposit is another possibility to avoid Lenders Mortgage Insurance.
You can borrow up to 105 per cent of the property value with a guarantor home loan. In this manner, there is no need for a deposit, and you can avoid paying an LMI charge as well.
Other discounts available
You may receive first home buyer discounts. You may be eligible for your state or territory’s First Home Owner Grant (FHOG) if you are a nurse and a first-time house buyer. You need to check with your local government for further information on the eligibility requirements of the grant.
There may be additional perks to nurses purchasing their first property, such as discounts on LMI premiums from some lenders. These offers may have their requirements, such as borrowing lower than a certain amount and paying the deposit with your own money.
Work with a Mortgage Broker
At AirBroker, our mortgage brokers are experts in handling nurse home loan applications. If you are a nurse and are finding it hard to find a lender who considers all of your income, then we may be able to help you.
If you are having a hard time finding an efficient and experienced mortgage broker for nurses, we have a page dedicated to this: How to find a good mortgage broker.
AirBroker has a wide range of lenders on our panel and in these circumstances, applying with the right lender is the key. We may be able to assist you with finding a lender that is flexible in assessing nurse home loan applications.
