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BUYING A HOUSE AS A TRAVEL NURSE



You have been working hard as a travel nurse and you have finally been able to save enough money for a down payment on a house. Hooray! You are ready to start looking at houses and you contact a mortgage lender to start the pre-approval process. You are giddy with excitement! And then the reality sets in... buying a house as a travel nurse is not going to be as easy as you thought...


Unfortunately, buying a house as a travel nurse proves to a little more difficult than as a staff nurse. Travel Connex founder Drew Jones found this out in 2020 when he and his wife Kaela bought their first home. Let's talk to Drew and take a look at why buying a house as a travel nurse can be difficult.


Drew's story









Drew Jones is an RN and founder of Travel Connex, a platform dedicated to providing all the best tips, information, and resources to travel nurses. Drew shares a little insight into when he and his wife Kaela bought their house in 2020.




You started travel nursing in 2017. When did you decide to buy a house?


Drew: My then fiancee and I started looking to buy a house in 2020. We were engaged and knew we wanted to start a family and buy a house in Georgia. We were able to save for the down payment of a house with the help of travel nursing and began the process in April of 2020. It was a crazy year for house buying and selling because of the historic low interest rates due to COVID!



About how long did the process take?


Drew: It took us about 2 months from beginning to end . What took the most time was gathering the documents needed to get the pre-approval. It took me days to track down all the documents needed, and often times they would come back asking for more documents. The process could take more or less time depending on how fast you are able to gather your documents. This process can be frustrating but you also you have to understand that they are loaning you hundreds of thousands of dollars, they have a right to know your financial situation before approving you for a loan.


What kind of documents do you need to have ready for the pre-approval?


Drew: Each person listed on the loan will have to show various documents. I bought the house with my wife, Kaela, so we each had to provide documentation for things such as:


W2s

Employment verification

Tax returns

Bank statements

Investment Accounts

Retirement Accounts

Real estate records

Car loans

Any other debt/assests



What did you find most difficult obtaining a loan as a travel nurse?


Drew: Where we ran into some difficulty was proving steady permanent employment. Mortgage lenders are looking for clients who have reliable and steady income through permanent employment. Kaela and I had both frequently switched travel nurse agencies and had small gaps in between contracts. Unfortunately, we were unable to get approved for a conventional loan through the first mortgage officer we talked with because of our work history and lack of "Permanent employment". Luckily, I was able to find a local bank who was able to approve us for an in-house loan. This bank was willing to lend us their own money however their terms were not as great as I was hoping to get with the conventional loan.


However, since buying our house I have learned how to get approved for a conventional loan as a travel nurse which typically has better interest rates and better loan terms.


Drew's Advice


What are some of your tips to make the process easier or for going through the process as a travel nurse?

Drew:

  • If you are planning to buy a house jointly with someone, it helps if this person has steady employment. Lenders like to see steady employment and steady income for at least the past 2 years.

  • If you are looking to buy a house within the next 2 years consider taking a higher hourly pay rate. This will help you qualify for a larger loan amount if needed. Tax free stipends are not considered income.

  • Find a loan officer who is familiar with working with travel nurses and their income earnings. Make sure this person is responsive and understanding of the different aspects associated with lending to travel nurses.

  • Talk to your loan officer about locking in your interest rate during the loan application process, especially if you think interest rates are going to increase in the near future. Locking in an interest rate does cost money but can save you thousands of dollars over time.

  • Just because you qualify for a loan up to a certain amount does not always mean you can afford a loan that size. When buying a home you have to remember the other costs of owning a home such as utilities, home insurance, property taxes, repairs, etc.

  • Check out the list of travel nurse recommended mortgage lending officers on Travel Connex.

  • Don't get discouraged! There are ways to work around issues with proving steady employment.


What's Different Buying a House as a Travel Nurse?



For those of you unfamiliar with buying a house, it is quite the process. You have to provide documentation for various items including two years worth of employment verification, proof of income, proof of assets, debt records, and the like . This is a standard process and requires time and effort to gather all of these documents.

But what's different about this as a travel nurse? There are two areas where buying a house as a travel nurse gets difficult: proving employment and proving income.


Proving Employment as a Travel Nurse




It is standard to have to provide proof of steady employment for the last two years in order to get approved to buy a house. As a staff nurse, this may be done more easily if you have worked the same facility the past two years. You only have one place of employment to verify. Even if you worked at a couple of different facilities over the past couple of years, it will probably be fairly easy to track down and less likely to be major gaps in employment.


However, a travel nurse has likely worked with several different companies and facilities over the course of two years. Travel nurses may also have significant gaps in employment if they take time off in between contracts. To a lender, having gaps in employment and working with several different companies may be seen as a red flag.


Tracking down two years worth of employment agencies can be cumbersome and certainly time consuming. If you work with varied companies over the years, it's hard to remember a company you worked with last year, much less two years ago! You may not even have the contact information of your old recruiter anymore.


And it's not as simple as just connecting them with your recruiter. The mortgage company will likely want to speak with the Human Resources department. Also some travel nurse companies only provide employment verification by an automated telephone service. They may also require information from each facility you worked at as well.

It's quite the headache!


Proving Income as a Travel Nurse




The other area that is difficult in buying a house as a travel nurse is proving your income.

But I am making MORE money than I ever did as a staff nurse you may protest. I have a 20% down payment right here and ready to go. How on earth will proving income be difficult as a travel nurse?


Not so fast. If you are yet to be a travel nurse, or a newbie travel nurse you may not understand how your income is reported. In simple terms, we have two different types of income as a travel nurse: taxable income and non taxable income. As a travel nurse, when you get your W2s at the end of the year it is only going to report your TAXABLE income.


Breaking Down Income


Your taxable income includes your hourly wage and some other miscellaneous items your travel nurse company may give to you in "bonuses", reimbursements, or other items. Your NON taxable income is paid to you in the form of stipends for both housing and meals/incidentals and is not taxed. The stipends are given to pay for housing and meals on while on assignment and are not considered income by most loan officers.


So let's just say for example, to keep it simple, last year you made $100,000. $50,000 of that was in taxable income, while the other $50,000 of that was in NON taxable income. (This is an arbitrary number to keep figures simple, this income is not guaranteed and percentages of taxed and non taxed income will vary contract to contract). Your travel nurse company only reports $50,000 for your income last year, because that is all that was taxable.


Now obviously the loan amount you would be able to get approved for with only a $50,000 reported income would be significantly lower than if you reported $100,000. And thus ladies and gentleman is the crux of the problem proving your income as a travel nurse! You made $100,000 last year, but on paper you only made $50,000.


You can still prove your income as a travel nurse, but it just may be more difficult and cumbersome. They will likely ask for additional information such as paystubs from your previous jobs and this process may take a lot longer than you anticipate. However, some companies may just outright not approve a loan if they are unfamiliar with working with travel nurses and how the pay is recorded.


Tips for Buying a House as a Travel Nurse




Buying a house has long been part of the American dream. Not only is it rewarding to buy a home, but real estate has continually proved to be a good investment. When you are considering buying a house as a travel nurse, it's best to make a strategic plan. Have an idea of when and where you want to buy a house, save a down payment, and follow some of our best tips below.


Pro Tips

  • Stay with a limited amount of companies over 2 years. If you do work with several different companies, be sure to stay organized and keep contact information for all. Additionally keep copies of some prior paystubs towards the end of your contracts and contact information for you previous companies.

  • Try to make minimal breaks in between contracts to prove a reliable and steady employment. Gaps in employment are a red flag to lenders.

  • Try to keep your hourly wage fairly high in your contracts. This is the reported income and can more easily be applied in proving your income. As a travel nurse typically we like to keep our wages low because that means a lower amount of taxes are taken out. But if you are only showing a $23/ hour wage for the last two years, it may be tougher to get approved for a loan amount you need to buy the home you want.

  • Keep records of financial information including investments, assets, and debt. A great way to stay organized is using a platform such as Mint to keep track of all your finances. Benefits of Mint include: staying on track with a budget and integrations with Credit Karma and TurboTax. It's a great way to stay organized and on top of your finances, keep track of your credit score, and input tax information if you choose Turbo Tax to file your taxes.

  • Prepare for the pre-approval process to take longer than expected. Not only does it take a while to gather all your documents a travel nurse, but also many companies are experiencing staffing shortages post COVID.

  • Lastly, get a mortgage lender who is familiar with travel nurses. A mortgage lender who is familiar with travel nurses will know how to navigate the difficulties of proving steady employment and income. One of your 1st questions to your mortgage officer should be "Have you worked with travel nurses in the past? Were you able to get them approved?"


Ready to Buy a House as a Travel Nurse?

Get in touch with one of our Travel Connex recommended mortgage lenders today!

Happy house hunting!



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