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Author: Elliott Culley - Director & Mortgage Adviser of Switch Mortgage Finance
Nurse Mortgage (Part 1)
Elliot Culley explains how the mortgage process works if you’re a nurse.
How do mortgages for nurses work?
It really depends on how your contract works with the NHS. If you’re employed on a permanent contract, you may find it that bit easier. Most lenders will just go off your annual salary, and if you’ve got any overtime, they’ll often accept that.
If you’re on a fixed-term contract, it can be a little more tricky. Some lenders will want potentially up to 12 months’ experience, but others can be a little bit more flexible if you work for the NHS.
Generally it can be quite standard and in line with what you might expect, but if you do have slightly unusual circumstances – which can happen with nurses – some lenders have more flexibility, which can help.
What are the eligibility criteria for nurses looking to obtain a mortgage?
The longer you’ve been in your role, the better. Some lenders can potentially just go off your first payslip, in theory, but if you’re looking to use overtime as well, you need more of a track record – potentially three months or longer.
Quite often nurses are on visas, and in that situation you may potentially need more deposit, perhaps 10% to open up a few doors, although some do look at a 5% deposit. It’s also about your time in the UK. If you are on a visa, quite a few lenders like you to have been here for a year, but again some can look at a shorter timeframe.
Are there any specific lenders or institutions that offer mortgages to nurses?
Most lenders will offer a mortgage to a nurse, but some can be more flexible. Some lenders may offer you a slightly higher borrowing amount, enhancing the Loan to Income ratio.
They can be more relaxed if you are a nurse on a fixed-term contract. If you’re doing that through the NHS, they will be more flexible and basically treat you as if you are employed.
Although there wouldn’t be enhanced rates for a nurse, there’s more flexibility, which can work in your favour.
What documentation is required to apply for a mortgage as a nurse?
From an income point of view, most lenders want three months’ payslips. If you’re looking to include your overtime, they’ll certainly want that, and some may even ask for six months’ details – and potentially a P60 as well. Those are the main things.
If you’re in a fixed-term contract, you’ll need to provide that contract, and if you’re on a visa, they’ll want to see your share code.
It’s very standard as regards the income side. They’ll also want to see proof of your deposit in a savings statement. If it is being gifted, we need a letter from the person providing that.
What is the typical interest rate for a mortgage as a nurse in the UK?
We can’t go into the specific rates, because they change every day. But there’s no reason why you can’t get the best rate at the time you’re looking for a mortgage.
It will depend on your credit score, what you’re trying to do and where you are. Being on an employed permanent contract will probably be a bit easier and you should have access to most lenders.
If you’re on a fixed-term contract or you’re a bank nurse, you may need a lender that’s a little more niche. But there are no enhanced rates or anything like that.
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Are there any limitations or restrictions on the type of property that can be purchased as a nurse?
The fact that you’re a nurse won’t restrict the type of property you can purchase. It’s more to do with your deposit. If you had just 5%, fewer lenders would lend to you on a new-build flat or a new-build house, potentially. Most want a 10% deposit.
It’s nothing to do with your employment or income, and more about the type of property and your deposit.
How does income verification work for nurses applying for a mortgage?
With nurses we often see extra parts to the income, such as working weekends or night shifts. Most lenders add all those extra bits together and take an average over the last three months.
If you’re on a basic salary, that would just be taken as is. For a bank nurse, you’re looking at probably six months’ verification, potentially even 12 months’ with some lenders.
What challenges or obstacles might nurses face when applying for a mortgage?
The main obstacle is probably your credit score, if anything. Just make sure you keep an eye on that so it’s as strong as possible when you’re doing an application.
If you’re not doing overtime consistently, some lenders may have an issue – they may not want to use income that’s not consistent.
If you’re a bank nurse or you’re supplementing your main income with bank work, lenders again want to see consistency in those hours. That can sometimes be an issue when coupled with the credit score. If both are as strong as possible, you’ll have the best chance to apply with most lenders.
Is it possible for newly qualified nurses to obtain a mortgage?
It shouldn’t really be a problem. As long as you’re on a permanent contract, you’ll find lots of lenders – they can potentially even go off the contract before you’ve started. If you’re within three months of starting that employed role, some lenders accept that.
If you have already started, some lenders may need a bit longer, especially if it’s your first job, while others could literally go off your first payslip.
Certain lenders will actually take a fixed-term contract from day one, as well. You could start that application before you’ve had your first payslip, but the lender will want to see it at some point, just to verify the income and that you have started the role.
Is it possible for bank nurses to get a mortgage?
With a bank nurse, it’s about providing flexibility. It’s temporarily covering other staff, a lot of the time. Because it’s not fixed hours, some lenders would treat you as a zero-hours contractor.
Usually with a zero-hours contract, you need 12 months’ history in that role. But for nurses, again, some lenders are much more flexible, because they are very confident that the work will be there for you via the NHS long-term. Some lenders will be happy with six months’ history, some potentially even three months’.
You might be using bank work to supplement your main role, and again, that’s fine. We’re looking at the same three or six month rule with some lenders. The longer you’ve been doing it, the better, but it’s not a massive problem if you’ve just been doing it for three months.
Are there any additional costs or fees associated with the mortgage that nurses should be aware of?
It’s the standard fees that anyone else would have on a mortgage. There may be a product fee and a valuation fee charged by the lender. You would also have costs for solicitors. There might be an application fee from some lenders.
It really does depend on your circumstances as regards to what those fees could be. Speak to your mortgage broker and we’ll tell you about the fees in detail – once we’ve had a look at everything and made a recommendation to you.
What else do we need to know about mortgages for nurses?
As always, preparation is key. Get in contact and start the process as soon as possible, so that anything that could cause an issue is picked up early and you can be well prepared.
When the time is right for that mortgage application to go in, everything will be where it needs to be, making the process as smooth as possible.
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