Lee and Neezam from Rebus explain the mortgage process for nurses.
Podcast approved by The Openwork Partnership on 12/06/2023.
How do I get a mortgage if I’m a nurse?
We help a lot of nurses with getting a mortgage. In terms of how you get one, it’s very similar whether you’re a nurse, a doctor, a mechanic or an engineer. Whatever you do, the process will feel very similar.
It always comes down to meeting the lender’s criteria. Every lender will have different lending policies, different lending criteria and different rules. They will lend you a different amount depending on their own affordability assessment. They’ll factor your income, how you evidence your earnings and how guaranteed it is. They will look at how long you’ve been in your current job, the kind of contract you’re on, what deposit you have and your credit scores.
Then they’ll give you a decision as to whether they’ll lend.
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What mortgage options are available for nurses?
There are some specific products that are perhaps more suited to NHS employees or professionals. You could be eligible for slightly better products or products that give you a bit more flexibility.
A common misconception with NHS employees and key workers is that there are special discounted rates available for you. Sadly, it’s not the case. However, there are lenders that offer greater flexibility for people like nurses and doctors – because ultimately you have complex income. You have various employment contracts and there are lots of complexities.
So while there aren’t any fancy rates or products, there are lenders that view NHS employees more favourably. That has an impact on how much you can borrow and potentially how much deposit is required. A good mortgage advisor will know which lenders are more flexible with NHS employees, and particularly nurses.
What discounts or schemes are available for nurses?
There are a few schemes out there and there’s massive demand for more, specifically for First Time Buyers and key workers.
Unfortunately the Help to Buy equity loan is no longer running, but there are a couple of schemes to replace that, such as the Deposit Unlock scheme. We’ve done a separate podcast episode on that, which can help nurses get on the ladder for the first time.
There are also a few new build developers that offer incentives for key workers including nurses. Barratt Homes, for example, are offering to contribute £1,000 towards a deposit for every £20,000 of the purchase price [information correct as at April 2023].
That could be a total contribution of about £16,000 towards your deposit. That’s a massive benefit for someone looking to get on the property ladder.
The First Homes scheme gives you a discount on property value of anywhere between 30% and 50%. That is most common in new build homes. Again it is sometimes limited to key workers – or you will be prioritised as a nurse.
There’s also the Shared Ownership scheme which again we’ve done a separate podcast episode on. It’s a fantastic way to get on the ladder if you’re a nurse – one of the challenges everyone faces is having that deposit or meeting the affordability requirements for the mortgage you need. If you’re buying a share of the property rather than 100% of it, you’re more likely to be able to get the sort of property you want.
A final option is Joint Borrower Sole Proprietor, which is effectively like the old guarantor mortgage. You’re getting support from somebody else, whose income boosts the affordability of your mortgage. The property is owned just by one person but the mortgage might be in two names. It’s very um, specialist but it’s something that we help a lot of clients with.
So there are a few schemes out there if you’re a nurse but, fingers crossed, we’ll see a bit more support in the near future.
How much can I borrow as a nurse?
It’s the magic question that everyone asks! There’s no kind of hard and fast rule on exactly what you can borrow. It gets even more complicated with a nurse, so I would stress the importance of speaking with a professional mortgage advisor.
It’s even more important if you get paid for unsociable hours or bank income, or you are on a zero hours contract or a fixed term contract. Each bank will assess you in very different ways.
One bank may offer you £100,000 and another may offer £200,000 – the variation is huge. All I can recommend is to do some preparation before you start looking at buying properties. Speak with a professional to understand what you can borrow based on your income.
There are just so many variables. It’s not the income alone – you’ve got your outgoings too and the amount of your deposit. Where you’re buying in the UK will also come into play.
Can agency nurses get a mortgage?
Agency nurses can find things a bit more limiting in terms of getting the mortgage. It usually depends how long you’ve been an agency worker. Agency staff carry a slight increased risk from a lending perspective, in that your work is less guaranteed than for someone on a permanent contract.
Most lenders will want to see that you’ve been doing it for a long period of time – generally 12 months plus. You can evidence that through 12 months’ pay slips for example or a contract. The lenders then look at what you’ve earned in the last 12 months and that income supports affordability.
So it is possible. A lot of lenders are not comfortable with it and some lenders will be a flat no for an agency nurse without a permanent contract or guaranteed hours. But it’s something we speak to a lot of lenders about. We know how they work.
We approach the right lenders that will look at you more favourably. They will take into account that nurses are always going to be in demand. It’s not like you’re an agency worker in an area where it’s difficult to find a job. Nurses are always needed.
How can a mortgage broker help with nurse mortgages?
If you’re listening to this, you’re a nurse and you’re trying to do it on your own, please don’t.
It’s very difficult. The various different incomes you get and the different contracts in the NHS can make it complicated.
It’s also about understanding what schemes are available to you, what you can borrow – a mortgage broker can answer all those questions for you. Doing it yourself is a minefield – there are more than 90 banks out there. So get some help and you will have peace of mind that you are doing the right thing.
Approved by The Openwork Partnership on 12/06/2023.
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