As a travel nurse considering buying a home, you might wonder: Can Travel Nurses Get A Mortgage? Absolutely! It’s achievable with the right knowledge and preparation. SIXT.VN understands the unique financial landscape of travel nursing and offers guidance to navigate the mortgage process successfully, ensuring you can secure the best mortgage for your financial needs. This includes managing variable income, understanding taxable versus non-taxable income, and addressing employment gaps. Let’s delve into how travel nurses can achieve their homeownership dreams with strategic planning, specialized loan programs, and financial savvy.
1. Understanding the Challenges of Unstable Employment History
One of the primary hurdles for travel nurses seeking a mortgage is perceived job instability. Lenders often prefer applicants with consistent, full-time employment. However, the nature of travel nursing, with its temporary contracts, can appear as “job-hopping” on paper.
Travel Nurse Working on a Laptop
Here’s how to overcome this perception and increase your chances of securing mortgages for travel nurses:
- Write a Letter of Explanation: Clearly explain the nature of travel nursing to the lender, highlighting the high demand for your specialty and the abundance of available contracts. As Jon Meyer, a seasoned loan officer, suggests, “This is probably your strongest option, and you shouldn’t have any problems provided you have documentation.”
- Accumulate Travel Nursing Experience: Aim for at least two years of travel nursing experience. This provides lenders with a more comprehensive history and greater confidence in your consistent earning potential.
- Maintain Consistency with One Agency: As a new travel nurse, consider sticking with one agency and ensuring you are paid as a W-2 employee. Moving between agencies might be seen as changing jobs.
- Keep Detailed Records: Maintain meticulous records of all pay stubs, W-2s, and contact information for each agency you’ve worked with. Lenders may require this information for verification purposes.
- Leverage Staff RN Experience: If you have less than two years of travel nursing experience, leverage your previous staff RN experience to demonstrate a continuous employment history.
FHA guidelines support this approach, stating that to be eligible for a mortgage, individuals must have “at least two years of documented previous successful employment in the line of work in which he/she is self-employed, or in a related occupation.”
2. Addressing Employment Gaps
Travel nurses often take time off between assignments, whether for personal reasons or waiting for the next suitable contract. These gaps can raise concerns for mortgage lenders.
2.1 How Long is a Gap in Employment?
The definition of an employment gap varies depending on the loan type:
- FHA: Defines an employment gap as at least one month.
- Conventional Loans (Fannie Mae): Does not specify a time but requires lenders to assess the history of variable income and determine if any gaps are consistent or longer than usual.
Any gaps longer than usual or exceeding one month (for FHA loans) require a letter of explanation.
2.2 How to Qualify for a Mortgage with Employment Gaps
To qualify for mortgages for travel nurses despite employment gaps:
- Build a Solid Job History: Accumulate at least 12 months, preferably 24 months, of travel nursing history to demonstrate consistent employment patterns.
- Document Typical Employment Gaps: Establish a clear pattern of typical employment gaps within your travel nursing career.
- Provide a Detailed Letter of Explanation: Offer a comprehensive explanation of how travel nursing works, including the reasons for taking time off between contracts.
Requesting a letter from your recruiter or agency HR department, detailing the travel nursing process, can further strengthen your case.
3. Managing Variable Income
Variable income is a common characteristic of travel nursing, influenced by factors such as location, contract terms, and seasonal demands.
3.1 Strategies for Managing Variable Income
To effectively manage variable income when applying for mortgages for travel nurses:
- Maintain a Favorable Debt-to-Income Ratio: Closely monitor and manage your debt-to-income ratio, considering the fluctuations in pay due to contract and location.
- Accumulate Income History: Gather at least 12 months, preferably 24 months, of stable income history before applying for a mortgage.
- Keep Comprehensive Records: Preserve all contracts, pay stubs, W-2s, and offer letters to document your income history.
According to Fannie Mae, “two or more years of receipt of a particular type of variable income is recommended; however, variable income that has been received for 12 to 24 months may be considered as acceptable income, as long as the borrower’s loan application demonstrates that there are positive factors that reasonably offset the shorter income history.”
4. Navigating Taxable vs. Non-Taxable Income
Travel nurses often receive a combination of taxable income and non-taxable income, with the non-taxed portion being per diem pay. Per diems are reimbursements for meals, housing, travel, and incidentals while working away from their “tax home.”
Travel Nurse Paystub Example
4.1 Can Per Diem Pay Be Used to Qualify for a Mortgage?
Whether per diem pay can be used to qualify for a mortgage varies by lender. Fannie Mae and HUD do not specifically address most per diem pay, leaving it to individual underwriters.
Housing Stipends: Fannie Mae states that housing reimbursements can be used as qualifying income if they have been received for the most recent 12 months and are likely to continue for three years.
4.2 Should You Agree to Receive Non-Taxable Income?
Angelina Gibson advises, “If I were giving advice to a travel nurse who wants to buy a home someday, I would say to take as much money as possible in taxable pay, rather than per diem. It’s just too much of a risk to work for two years, only to discover a lender can’t use all that income history.”
If you have a history of high per diem pay, consider negotiating lower per diem pay and higher base pay to increase your average pay and qualify for a mortgage sooner.
5. Essential Mortgage Approval Tips for Travel Nurses
To maximize your chances of mortgage approval, consider these crucial tips:
5.1 Save All Travel Nursing Contracts
Maintain physical and digital copies of all contracts between yourself and your travel nursing agencies. These contracts provide essential proof of consecutive assignments and help explain any gaps in employment.
5.2 Avoid High Non-Taxed Stipends and Low-Taxable Income
Reject assignments with high non-taxed stipends and low taxable pay. Non-taxed stipends are not considered wages by the IRS, potentially decreasing the amount of your loan.
5.3 Understand IRS Tax Guidelines for Traveling Contract Workers
Familiarize yourself with IRS Publication 463 to understand the tax implications of travel nursing, particularly regarding non-taxed stipends.
5.4 Maintain a Tax Home
Ensure you maintain a tax home to remain eligible for non-taxed stipends. Meeting at least two of the following requirements is crucial:
- Maintain regular employment within the area of your tax home.
- Maintain a permanent address within your tax-home area, paying the mortgage and handling repairs.
- Return to your tax-home area about every 12 months to work for at least 30 days per year.
6. Exploring Specialty Mortgage Loans for Travel Nurses
Several specialized home loan programs cater to nurses and other healthcare professionals, making homeownership more accessible.
6.1 Nurse Next Door
The Nurse Next Door program offers housing grants of up to $8,000 to all healthcare employees, including nurses, medical staff, and doctors. It also provides potential down payment assistance of up to $10,681 and reduced closing costs.
6.2 Homes for Heroes
Homes for Heroes is a nationwide housing program aimed at making home buying more affordable for first responders, teachers, military personnel, and healthcare professionals. According to their website, “Most heroes save at least $3,000 when they buy or sell a home with us.”
6.3 Down Payment Assistance Programs
Down payment assistance (DPA) programs offer grants and low-interest second mortgages to help healthcare professionals afford a house, often covering both the down payment and closing costs.
7. Standard Mortgage Loan Options
In addition to specialized programs, travel nurses can explore standard loan types that offer affordable financing and lower interest rates.
7.1 Conventional Loans
Conventional mortgages, also known as conforming loans, are the most common type of home purchase loan. First-time home buyers may qualify with as little as 3% down, though private mortgage insurance (PMI) is required for down payments less than 20%.
7.2 FHA Loans
Backed by the Federal Housing Administration, FHA loans require just 3.5% down and are more flexible regarding employment gaps, work history changes, and credit scores. These are excellent options for first-time home buyers who need leniency in certain aspects of their financial situation.
7.3 VA Loans
For nurses with a military background, VA loans offer zero down payment and are lenient about credit scores and income types. Eligibility typically requires a two-year history of active service or six years in the Reserves.
7.4 USDA Loans
Guaranteed by the United States Department of Agriculture, USDA loans require no down payment and no ongoing mortgage insurance. However, they come with income limits, and the property must be within an eligible rural area.
8. Managing Your Home and Mortgage While on the Road
One common concern for travel nurses is managing their home and mortgage while away on assignments.
8.1 Short-Term Rentals
Consider using your home as a short-term rental while you’re away. This can help you break even or even generate income.
8.2 Long-Term Renters
Opt for a long-term renter who can look after the house and provide ongoing passive income.
8.3 Move-In Timeline
Remember that most mortgage rules require you to move into the home within 60 days of buying it. Ensure you can meet this requirement, even if you have upcoming contracts.
8.4 Property Management
If you plan to set up short-term rentals, consider hiring a property management company to handle bookings and other details.
8.5 Finding Good Renters
Advertise your property in travel nursing forums or Facebook groups to rent it to fellow travel nurses, fostering trust and accountability.
9. Homeownership in Vietnam: A Guide for Expats and Travel Nurses
While the focus has been on mortgages in the US, let’s briefly touch on homeownership in Vietnam for expats and travel nurses:
9.1 Legal Framework for Foreign Homeownership
In Vietnam, foreign individuals are allowed to own apartments and houses under specific conditions. The regulations are primarily governed by the Housing Law of 2014 (amended in 2019) and related decrees. Key points include:
- Eligibility: Foreigners with a valid visa and who are not enjoying diplomatic or consular immunity are eligible to purchase property.
- Types of Property: Foreigners can buy apartments in commercial residential projects. They can also purchase houses, including villas and townhouses, in projects that are not located in areas restricted for national defense and security.
- Ownership Term: The ownership term is 50 years, renewable for another 50 years subject to government approval. For foreigners married to Vietnamese citizens, ownership can be freehold.
- Restrictions: The total number of apartments owned by foreigners in an apartment building cannot exceed 30% of the total units. In a specific ward, the number of houses owned by foreigners cannot exceed 10% of the total houses.
9.2 Steps to Buying Property in Vietnam
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Due Diligence:
- Verify the legality of the property, ensuring it has the necessary permits and certifications.
- Check for any existing encumbrances, such as mortgages or disputes.
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Negotiation and Agreement:
- Negotiate the terms of the sale, including the price, payment schedule, and handover date.
- Draft a preliminary agreement outlining the key terms.
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Deposit:
- Pay a deposit, typically around 10% of the purchase price, to secure the property.
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Sale and Purchase Agreement:
- Execute the Sale and Purchase Agreement (SPA) with the seller. The SPA should detail all terms, conditions, and legal obligations.
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Payment:
- Make payments according to the schedule outlined in the SPA. Payment can be made through a bank transfer or other agreed-upon method.
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Registration:
- Register the property ownership with the local land registry office. This involves submitting the necessary documents, including the SPA, passport, visa, and proof of payment.
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Ownership Certificate:
- Obtain the ownership certificate (Red Book or Pink Book) from the land registry office, which confirms your legal ownership of the property.
9.3 Key Considerations for Foreign Buyers
- Legal Advice: Engage a reputable lawyer familiar with Vietnamese property law to guide you through the process.
- Currency and Exchange Rates: Be mindful of currency exchange rates and regulations when transferring funds for property purchase.
- Taxes and Fees: Understand the taxes and fees associated with property ownership, including registration fees, stamp duty, and annual property taxes.
- Repatriation of Funds: Ensure you are aware of the regulations regarding the repatriation of funds if you decide to sell the property in the future.
9.4 Benefits of Homeownership in Vietnam for Travel Nurses
- Investment Opportunity: Vietnam’s real estate market has been growing, offering potential capital appreciation.
- Rental Income: Travel nurses can rent out their properties while away on assignments, generating passive income.
- Stable Base: Having a home provides a stable base in a vibrant and culturally rich country, particularly appealing to those who plan to spend significant time in Vietnam.
10. FAQ: Mortgages for Travel Nurses
10.1 Can You Get Approved for a Mortgage as a Travel Nurse?
Yes, it’s possible! Lenders understand the unique nature of a travel nurse’s income and employment structure. Work with mortgage professionals experienced in variable incomes and non-traditional employment histories.
10.2 How Do You Get a Mortgage as a Travel Nurse?
Gather documentation reflecting your income stability and financial health, including tax returns, employment contracts, and pay stubs. Find a lender who recognizes the unique financial circumstances of travel nurses.
10.3 What Are the Requirements for Getting a Mortgage as a Travel Nurse?
Key requirements include a stable income history, a good credit score, and sufficient savings for a down payment. Lenders will also look at your debt-to-income ratio. Maintain thorough and organized financial records to demonstrate your reliability as a borrower.
10.4 Does FHA Allow Per Diem Income to Count Towards a Mortgage for Travel Nurses?
Yes, under certain conditions. To include per diem income, you typically need to demonstrate a history of receiving this type of income and the likelihood of its continuance. FHA loans are often a good fit for travel nurses due to their more flexible income requirements and lower down payment options.
10.5 What Are Fannie Mae Guidelines for Traveling Nurses?
Fannie Mae’s guidelines are designed to accommodate the unique financial situations of professionals in this field. These guidelines may include considering variable income streams and employment gaps common among travel nurses. Provide detailed employment and income documentation to establish income stability and reliability.
11. Ready to Explore the Best Mortgages for Travel Nurses?
Happy Travel Nurse with Keys
Embarking on the journey to homeownership as a travel nurse is an exciting step. Securing mortgage pre-approval is an empowering first move, clarifying your budget and strengthening your position as a buyer.
Concerned about your credit score? Applying for pre-approval has minimal impact on it. Click below to explore your options for mortgages for travel nurses and take the first confident step towards realizing your dream of homeownership.
Even if the outcome isn’t immediate approval, you’ll gain valuable insights on the path to owning your home.
SIXT.VN understands the unique needs of travel nurses and is committed to providing tailored solutions for a seamless home-buying experience. Contact us today to explore our specialized services, including personalized consultations, assistance with documentation, and connections to trusted lenders familiar with the travel nursing lifestyle. Let SIXT.VN help you achieve your dream of homeownership while you continue to make a difference in healthcare. Reach out to us at Address: 260 Cau Giay, Hanoi, Vietnam. Hotline/Whatsapp: +84 986 244 358. Website: SIXT.VN. Time to make a move? Let us find the right mortgage for you
