Lenders Mortgage Insurance, often referred to as LMI, is a type of insurance that most lenders require borrowers to pay if they cannot provide a 20% deposit of the property value. This insurance protects the credit provider in the event the borrower defaults on the home loan. The cost of this insurance, known as the LMI premium, can be quite substantial, running into tens of thousands of dollars depending on the loan amount and the value ratio of the loan to the property value.
For nurses, some lenders offer a unique advantage: the possibility of an LMI waiver. This means that as a nurse, you might be able to borrow a high percentage of the property value without the need to pay LMI, which can significantly reduce your purchasing costs.
Mortgage brokers play a significant role in helping nurses to secure a home loan without having to pay for LMI. With an understanding of different lenders' lending criteria, they can direct you to those credit providers who offer LMI waivers for nurses.
Eligibility criteria vary across lenders, but in general, you must have a strong income and minimal debts to qualify for an LMI waiver. Some lenders may also require you to have a university degree in nursing, stable employment, and good credit history.
It's crucial to understand that while many perks come with nurse home loans, such as discounted interest rates and waived LMI, each lender's criteria differ. Working with mortgage brokers can help minimize the risk of your home loan application being declined. They have extensive knowledge of the lending criteria from various lenders and can guide you to the one lender that will offer you the best loan terms based on your financial situation.
The job income of a nurse is typically made up of normal base salary, overtime income, and various allowances. While most lenders only consider your base salary, some will take into account your overtime income and even non-taxable income such as meal allowances and fringe benefits, which can significantly boost your borrowing capacity.
Your taxable income primarily consists of your normal base salary and any overtime income. This is the income most lenders will consider when determining your borrowing capacity. However, some lenders may also consider non-taxable income, such as shift penalties and meal allowances. It's important to confirm with your chosen lender or mortgage broker how they assess your income.
As a nurse, your borrowing capacity can be significantly higher than most borrowers because of the nature of your profession. Many lenders consider nurses to be low-risk borrowers due to their stable employment and regular income.
Various factors can affect your borrowing capacity. These include your taxable income, non-taxable income (like meal allowances), stable employment, the size of your deposit, and whether you have any existing debts such as a car loan. Understanding these factors can help you maximize your borrowing power.
While some lenders are cautious about considering overtime income because it is not always guaranteed, many understand that overtime is a regular part of a nurse's job. Therefore, they are willing to consider 100% of your overtime income, which can greatly increase your borrowing capacity.
Having a second job, particularly in the same industry or same line of work, can enhance your borrowing capacity. A second job income is typically viewed favorably by most lenders, especially if it's from a different hospital or medical facility. However, remember that the income from your second job will be considered in conjunction with other factors like your main job income and any existing debts.
How much deposit you need to secure a home loan varies among lenders and depends on factors like the property value, loan amount, and your financial status. However, most lenders generally require a deposit of at least 5-20% of the property value.
In most cases, lenders want to see that a part of your deposit comes from genuine savings, as it shows your ability to manage money effectively. Genuine savings could be money saved over time in a savings account, term deposits, shares, or even a gift that has been in your account for a certain period.
The size of your deposit plays a role in whether you'll need to pay LMI. Most borrowers who can't provide at least a 20% deposit have to pay LMI. However, as a nurse, you may be eligible for an LMI waiver, allowing you to borrow a higher percentage of the property value without needing to pay LMI.
LMI premiums can vary greatly depending on the lender, loan amount, and the size of your deposit. The higher the loan amount or the smaller the deposit, the higher the LMI premium tends to be.
Several factors influence the cost of LMI. These include the loan amount, deposit size, and loan type. Lenders may also consider your credit history and employment status. As a nurse, you may have the advantage of having LMI costs waived or discounted.
One of the most effective ways to reduce the LMI premium is by increasing the size of your deposit. A larger deposit decreases the loan to value ratio, reducing the lender's risk and therefore, the LMI premium.
Maintaining a good credit history can also play a part in reducing the cost of LMI. Lenders see borrowers with good credit history as less risky, which could result in a lower LMI premium.
Choosing the right loan and lender is also crucial. Some lenders offer professional packages to certain borrowers, which can include discounted LMI premiums. A mortgage broker can help you find these deals.
One of the main benefits for nurses when it comes to home loans is the potential for LMI waivers and discounts. Some lenders will waive the LMI premium for nurses altogether, while others might offer a significant discount.
In addition to LMI waivers and discounts, some lenders offer discounted interest rates to nurses. These can come as part of a professional package or as a stand-alone feature.
Lenders often have flexible lending criteria for nurses. They may be willing to consider overtime, second job income, and even non-taxable income when determining your borrowing capacity.
Not all lenders consider overtime income when assessing your home loan application. However, most lenders will accept 50-80% of your overtime income. There are a select few that will consider 100% of your overtime income, but this usually comes with conditions, such as evidence that you've been earning it regularly over a certain period.
Lenders who consider professions in their lending criteria are more likely to consider 100% of your overtime income. These lenders understand the nature of the nursing profession, where shift penalties, overtime, and other income add-ons are common.
Nurses often receive meal allowances and fringe benefits as part of their employment package. Most lenders will consider these income add-ons when calculating your borrowing power. They can potentially increase your borrowing capacity and give you access to better loan terms.
Some components of your income, like meal allowances, can be tax-free. This can further enhance your borrowing capacity as it boosts your net income.
Most lenders will consider all of your income sources when calculating your borrowing power. If you have a second job at a different hospital, this income can be factored into your application. However, it is essential to show that the income from your second job is stable and regular.
Lenders look favorably on stable employment. If you have been with your current employer for a few years and have a strong income, this can increase your chances of getting a good home loan offer.
A nurse home loan is a type of mortgage tailored to meet the unique needs and circumstances of nurses. These loans often come with special features like waived LMI, discounted interest rates, and flexible lending criteria.
Yes, you can get a home loan if you work part-time. However, lenders may limit the loan amount based on your part-time income.
Yes, many lenders will include overtime and second job income in their calculations. However, they typically require proof that you've been receiving this income consistently.
Yes, some lenders offer home loan discounts for nurses, including waived or discounted LMI, lower interest rates, and flexible lending criteria.
Not all banks offer nurse home loans, but many do. It's worth shopping around or using a mortgage broker to find the best deal for your circumstances.
