Mortgage For Nurses
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Mortgage For Nurses
Hemat Natha explains mortgages for nurses and answers some frequently asked questions.What is a nurse mortgage?
There isn’t a specific nurse mortgage, a nurse will apply for the same mortgage products as anyone else.
Does a nurse mortgage differ from a regular mortgage?
No, the main consideration is that nurses in the UK primarily work for the NHS and their incomes can be quirky. A nurse has lots of different allowances: shift allowances, big town allowances and lots of different things on your payslips.
With nurse mortgages, it’s more about income and how we can maximise affordability.
What are the eligibility criteria for a nurse looking to get a mortgage?
The criteria for mortgages are the same for everyone. You need to have a good credit report, although not necessarily a good score, as we’ve covered off in another episode. Lenders need your ID, and we’ll need to assess your income and whether you have any life insurance, critical illness policies or Wills in place.
That allows us to then advise on the borrowing we can obtain. We’d look at all forms of income including, all of the shift allowances and we may ask for additional documentation to verify that.
You’ve also got bank income – so income for the additional shifts that our heroes do. I call them heroes because nurses are absolute heroes, from firsthand experience.
Without nurses doing bank work and additional shifts, our lovely NHS wouldn’t be stable. The good thing is we can take that bank work into account for affordability purposes.
What are the benefits for a nurse getting a mortgage compared to others?
There are no differences. We will go to the lender and get you the maximum amount of borrowing if that’s your requirement. We will do everything possible to give you advice and get you the right mortgage.
For a nurse, it might be important to get a home or a flat near a hospital so you can avoid additional costs in travelling to work. It might help you do that extra bank shift or just to get home quickly. So there’s lots of considerations. We will do all those checks and advise throughout the whole process.
Are there any specific lenders or institutions that offer nurse mortgages?
All lenders will offer mortgages to nurses if you’re buying a residential property. The difference will be how each lender assesses your income, your shift allowances and the additional rates nurses get, and what you get from bank work.
That’s the only variation. Everyone’s circumstances are individual and we will sit down and understand your income structure and then apply it.
What documentation or proof is required to apply for a mortgage as a nurse?
Generally the nurses I’ve dealt with are employed through the NHS, in which case you need a standard three months’ payslips. We may go up to six months payslips to verify any additional allowances over time. Usually you need a P60 to verify your income on an annual basis and we also look at shift work or bank work.
We’re looking for a track record of bank work and whether it’s been consistent over the last 12 months. We also ask for six months worth of bank statements so that we can avoid going back and forth.
It’s about making sure the mortgage meets your situation. The last thing that we want to do is find a mortgage for a nurse and they’re then not able to do the bank work, which makes the mortgage unaffordable. We don’t ever want our heroes to have that stress.
What is the typical interest rate for a nurse mortgage in the UK?
Rates change all the time. We’re recording this in October 2023 and we’re seeing the rates drop now, which is really good.
They had been scarily high in some Loan to Value brackets, but they’ve started to drop. So let us tell you the rate, let us understand your circumstances and then we will search the market and give you applicable rates and fees for your circumstances.
How does the repayment period for a nurse mortgage compare to other mortgage options?
It’s no different. You can choose a term up to retirement. So if you’re retiring at age 70 or 75 you can take the mortgage until then. Again we will sit down with you and look at the monthly payments. We’ll talk about the term to make sure it’s affordable for you.
Are there any limitations or restrictions on the type of property that can be purchased with a nurse mortgage?
There are no limitations or restrictions. There is a lender out there for virtually anything. If there isn’t we will be the best place to let you know.
Obviously, if you’re doing a residential mortgage the property has got to be habitable. But we see mortgages for thatched roofs, high-rise flats in central London, new builds and a lot of quirky types of property as well.
Can you explain how income verification works for nurses?
As I mentioned in another question, it’s all about payslips. We break down your allowances and look how consistent those allowances are. If you do bank work we will look at that as well.
We’ll do the affordability checks and that’s it, there’s nothing much more to it. If you want the maximum loan available we’ll find the most appropriate provider to let you do that.
What challenges or obstacles might nurses face when applying for a mortgage?
It might be that you want to purchase in a certain area and can’t obtain the loan you need. It may be because your overtime has not been consistent – you may have missed a week or two of overtime and that drops the averages.
Some allowances you receive might not be acceptable by the lender – those are the challenges and obstacles you might face, but we can get over those by moving to another lender that accepts your set of circumstances.
Your credit report is key. For example, to check if there’s been a missed payment on any credit cards in the past that could have a possible impact. We’re able to guide and advise what can be done – if it’s not now, it could be in a few months.
Can it be better to wait?
Definitely. My first ever mortgage was for a nurse called George – it took us four years to get him into a property. We did mortgages on four properties, and on the third one, on the day of exchanging I was so happy we’d finally got George a home. But he turned around and said he couldn’t purchase this home.
There were damp issues and he didn’t have the money to rectify them. I was a bit angry after so much hard work with the mortgage, the legals and advice at every step… But he was right to do that. There were obvious damp issues and for the health of his children it was really important.
In the end, he found a home that was larger and had more bedrooms for the same price. There were no damp issues and we got him that home. So sometimes it is best to wait, and good things will happen.
His circumstances changed over the four years drastically – from just him and his wife to ultimately three children while applying for that mortgage and moving into their home. We’re still in touch and have just done his remortgage recently.
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Have you got another nurse mortgage case study?
Yes. I got talking to one of the dad’s at the school my daughter attends and he works in critical care. He works loads of hours and I explained that in his situation, he wasn’t ready at the time but we set out what he needed to do to get ready for a mortgage.
In January 2022 he was ready and we were able to get in before the rates started to creep up. They moved into their home just in time for last Christmas and they sent me a video, which was fantastic. It was so amazing to do that. He also didn’t take a day off or a night shift off, we worked inbetween. We produced a plan, he executed the plan… and it was such a celebratory moment watching that video at Christmas.
Sometimes people make things very complex in their head but with professional advice we can declutter it all and give that right advice.
Is it possible for newly qualified nurses to obtain a mortgage?
Absolutely. You can apply for a mortgage with an employment contract. If we know that a nurse is joining an NHS Trust in six months’ time and has an employment contract we can get them a mortgage.
For example, if they’re moving from London to the North East – we can help them buy a property before they start the new contract. The NHS is a big, legitimate employer and there are lenders that will take an employment contract six months in advance. So that’s worth bearing in mind.
Are there any additional costs or fees associated with getting a mortgage as a nurse?
No, just the standard valuation fees and arrangement fees. I feel it’s our duty to help our nurses to get on the property ladder and be happy in their homes.
Can self-employed nurses apply for a mortgage?
Yes. Some nurses that work with the NHS might also do care work or private work. Sometimes they get paid via umbrella companies or they have their own sole trader companies or limited companies.
That’s quite technical, we can use all sorts of different types of income. There’ll be some additional questions to ask, but the answer is definitely yes.
Are there any specific incentives or discounts available for nurses when obtaining a mortgage?
There may be some preferential rates with some lenders but it’s very rare. Some lenders do give free valuations on remortgages, some give free legals and cashback as well.
But it’s usually rolled up in the cost. So let us work it all out and see if the incentives are worth it – we’ll advise you whether you should go for it or not.
How does the process of applying for a mortgage as a nurse differ from a regular mortgage application?
It doesn’t, it’s a standard thing. Let us get to know you, your income, your personal circumstances and your financial circumstances. Let us take that away, do some research and give you some rates.
We’ll talk to you about your monthly payments. We like to play devil’s advocate: we ask additional questions, like what would happen if bank work was not there or if your circumstances were to change. Could you still afford that?
It’s not about doing a mortgage. It’s making sure that when we do arrange a financial commitment that you’re comfortable.
We’ll talk to you then about what happens if you’re not able to work – exploring cover like buildings insurance, life insurance, critical illness cover and income protection. The good thing is that the NHS offers good sickness benefits. We’ll walk you through it all.
What financial planning considerations should nurses keep in mind when applying for a mortgage?
We take a holistic approach in getting to know you and understanding what the NHS provides nurses in terms of workplace benefits. We’ll top up anything in terms of any benefits or insurance policies that are advisable to protect you in the event of anything unexpected happening.
How does it work with nurses getting a joint mortgage?
If a couple are both nurses, we’ll take all of their income and then apply for the mortgage. We’ll get to know you both, your income, your circumstances and use every bit of income if we need to max out affordability. We make sure it is truly affordable and then take you both through the process.
What happens if a nurse’s employment circumstances change after obtaining a mortgage?
It’s really important that you are able to sustain and maintain your mortgage payments. If you are unable to, you should inform the lender. There are things they can do to help.
As an example of changing circumstances, say you’re a nurse employed by the NHS and you suddenly get a lucrative new contract with a company employing you, you don’t need to inform the lender. We just need to be careful when your rate comes up for renewal to make sure that you’ve got enough proof of income to get a new rate with another provider.
We’re also able to secure rates with your existing provider. Six months before renewal, we will be in contact and at that point we will understand what you can or can’t do.
Are there any specific terms or conditions that nurses should be aware of when considering a mortgage?
We’ll discuss that when we present quotes and illustrations. We’ll talk about the rates, the incentives and early repayment charges. We’ll talk about what your payment will be if you don’t renew your product, as well.
We explain how to complain if there’s a complaint. We will walk you through everything. It’s standard in our industry to make sure that nurses and all clients understand the commitments that they are entering into.
What other advice would you give to nurses who are considering applying for a mortgage?
Don’t have that mind block. Let us do it. We’ll tell you what you need to do, we’ll walk you through it. You won’t need to take a day off and there are no fees for nurses.
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