As a travel nurse, you enjoy the freedom and adventure of working in different locations, often experiencing a new city or town every few months. However, this flexibility also brings unique challenges, especially when it comes to securing a mortgage. Many traditional lenders prioritize stable employment and consistent income—criteria that don’t always align with the lifestyle of a travel nurse. Fortunately, there are mortgage lenders who cater specifically to the needs of healthcare professionals, including travel nurses. This guide will explore the top mortgage lenders in 2024 for travel nurses, providing insight into loan types, eligibility criteria, tips for overcoming employment gaps, and strategies for securing the best financing options.
Understanding Mortgage Basics for Travel Nurses
Loan Types
As a travel nurse, understanding the different types of mortgages available can help you choose the best option based on your financial circumstances and long-term goals. Here are some of the most common loan types that may be a good fit for your situation:
- Conventional Loans: Conventional loans are popular mortgage options, often offering lower interest rates for borrowers with strong credit scores and stable income. However, the downside for travel nurses is that conventional loans typically require higher down payments (usually around 20%) and may have stricter employment verification standards. If you have a high credit score and enough savings for a substantial down payment, a conventional loan can provide flexible terms and competitive rates.
- FHA Loans: The Federal Housing Administration (FHA) offers loans that are more accessible to borrowers with lower credit scores or limited savings. FHA loans require as little as 3.5% down and are ideal for travel nurses who may not have a large amount saved for a down payment. However, borrowers must pay mortgage insurance premiums, which can increase the overall cost of the loan. FHA loans are often used by first-time homebuyers who may have a more limited credit history.
- VA Loans: For veterans and active-duty service members, VA loans are among the most attractive mortgage options. These loans, backed by the U.S. Department of Veterans Affairs, offer zero down payment options, no private mortgage insurance (PMI), and competitive interest rates. If you are a travel nurse with military experience, a VA loan is an excellent choice due to the favorable terms.
- USDA Loans: If you are considering purchasing a home in a rural area, USDA loans may offer benefits such as no down payment and lower mortgage insurance premiums. However, you must meet certain income limits and purchase a home in a designated rural area. For travel nurses working in smaller, rural hospitals or clinics, USDA loans can be an affordable option.
- Specialized Mortgage Products for Travel Nurses: Some lenders offer mortgage products tailored specifically to healthcare professionals, including travel nurses. These lenders understand the unique employment and income challenges that come with being a travel nurse, such as varying income levels, employment gaps, and housing stipends. These specialty mortgage products may offer more flexible underwriting criteria, making it easier for travel nurses to qualify for a home loan even with variable income.
Interest Rates
The interest rate you secure on a mortgage is one of the most important factors in determining how much you’ll pay over the life of the loan. Travel nurses should work to improve their credit score before applying for a mortgage, as this will help secure lower interest rates. Here are two common mortgage rate structures:
- Fixed-Rate Mortgages: A fixed-rate mortgage locks in your interest rate for the entire loan term (usually 15, 20, or 30 years). This is ideal for travel nurses who prefer the stability of consistent monthly payments and plan to stay in one home for a long period.
- Adjustable-Rate Mortgages (ARMs): An ARM typically offers a lower initial interest rate for a set period (e.g., 5, 7, or 10 years), after which the rate adjusts based on market conditions. This can be advantageous if you plan to sell the property or refinance before the rate adjusts. Travel nurses who know they won’t stay in one location for more than a few years might benefit from the lower initial rates offered by ARMs.
Maintaining a high credit score is crucial for securing favorable interest rates. Lenders typically offer their best rates to borrowers with a credit score of 740 or higher. Paying bills on time, reducing debt, and regularly monitoring your credit report can help improve your score before applying for a mortgage.
Eligibility Criteria for Travel Nurses
To qualify for a mortgage as a travel nurse, lenders will evaluate several factors, including your employment history, income stability, and credit score. Here’s a breakdown of the key eligibility criteria:
- Employment History: Lenders typically prefer borrowers with stable, full-time employment. As a travel nurse, your employment history may involve short-term contracts with different healthcare providers, which can raise concerns for some lenders. To overcome this, provide a detailed work history that demonstrates consistent employment over time. Highlight any long-term contracts and explain any gaps between assignments.
- Income Verification: Travel nurses often receive income from various sources, including salary, housing stipends, and bonuses. Lenders will want to verify that you have a steady income to meet mortgage payments. To strengthen your application, keep meticulous records of your income, including W-2s, tax returns, pay stubs, and employment contracts.
- Credit Score: Your credit score plays a significant role in determining your eligibility for a mortgage and the interest rate you’ll receive. Lenders generally require a minimum credit score of 620 for conventional loans, though FHA loans may be available to borrowers with scores as low as 580. The higher your credit score, the better terms and rates you’ll qualify for.
- Debt-to-Income (DTI) Ratio: The DTI ratio is the percentage of your monthly income that goes toward paying debts. Lenders prefer borrowers with a DTI ratio of 43% or lower, though some loan programs allow higher ratios. Travel nurses with variable income should carefully manage their debt to ensure a favorable DTI ratio.
Unique Challenges for Travel Nurses in Securing a Mortgage
Variable Income
As a travel nurse, your income may fluctuate based on your contracts and assignments. While this flexibility is one of the perks of being a travel nurse, it can also be a challenge when applying for a mortgage, as lenders prefer consistent, predictable income.
Strategies to Overcome Variable Income Challenges:
- Demonstrate income stability: Keep detailed records of your income over at least two years, including contracts, pay stubs, and tax returns. Lenders want to see that despite the variability, you maintain a steady overall income.
- Work with a lender who understands healthcare professionals: Some lenders specialize in mortgages for healthcare workers and are more likely to consider income from housing stipends and contract work.
Employment Gaps
Travel nurses often have gaps between contracts, which can raise red flags for lenders. These gaps may be seen as periods of unemployment, which can hurt your chances of mortgage approval.
Strategies to Overcome Employment Gaps:
- Provide a letter of explanation: If you have employment gaps, include a letter explaining the reasons for the gaps and how they relate to your profession as a travel nurse. Emphasize the short-term nature of your contracts and your ability to secure new assignments regularly.
- Show proof of future contracts: If you have already secured future contracts, include them with your application. This can help demonstrate ongoing employment stability.
Debt-to-Income Ratio
Managing debt while juggling variable income can be challenging. Travel nurses may face higher DTI ratios due to student loans, credit card debt, or other financial obligations.
Strategies to Improve Your DTI:
- Pay down debt: Focus on reducing your debt before applying for a mortgage. Paying off credit card balances, student loans, or car loans can lower your DTI ratio and improve your chances of approval.
- Consider a larger down payment: Making a larger down payment can reduce the loan amount, lowering your monthly payments and improving your DTI ratio.
Top Mortgage Lenders for Travel Nurses in 2024
Several mortgage lenders offer specialized services or products tailored to healthcare professionals, including travel nurses. Here are the top mortgage lenders to consider:
1. Alliant Credit Union
Why Alliant: Alliant Credit Union is known for offering competitive mortgage rates and products that cater to healthcare professionals. Their mortgages are designed with flexibility in mind, making them ideal for travel nurses with variable income. Alliant’s online platform also makes it easy to apply and manage your mortgage from anywhere, which is important for nurses who are constantly on the go.
- Pros: Competitive rates, no lender fees, flexible loan products, user-friendly online platform.
- Cons: Must become a member of the credit union.
2. Navy Federal Credit Union
Why Navy Federal: Navy Federal Credit Union offers mortgage products with favorable terms for veterans and active-duty service members, including travel nurses. Their VA loans come with no down payment, no PMI, and competitive interest rates, making them an excellent choice for military-affiliated travel nurses.
- Pros: No PMI, low down payment options, VA loan eligibility, military-friendly.
- Cons: Must be a member with military affiliation.
3. SunTrust (Now Truist)
Why Truist: Truist offers a wide range of mortgage options, including conventional, FHA, and VA loans. They have experience working with healthcare professionals, making them a good option for travel nurses looking for flexible loan terms. Truist also offers first-time homebuyer programs that can help nurses with down payment assistance.
- Pros: Customizable loan terms, strong customer service, first-time
- Cons: Must meet certain income requirements for specialty programs.
4. Fairway Independent Mortgage Corporation
- Why Fairway: Fairway offers specialized loan programs for healthcare workers, including travel nurses. They have experience working with variable income and contract employees, making them a top choice for nurses.
- Pros: Flexible loan options, experienced with variable income.
- Cons: May have higher fees than some other lenders.
5. Guaranteed Rate
- Why Guaranteed Rate: Guaranteed Rate is known for its streamlined online application process, making it ideal for travel nurses who may be on the go. They offer competitive rates and specialize in FHA and VA loans.
- Pros: Easy online application, fast approval process, competitive rates.
- Cons: Some borrowers report higher closing costs.
Mortgage Tips for Travel Nurses
Improve Your Credit Score
Before applying for a mortgage, travel nurses should focus on improving their credit score. Steps to improve your score include paying down credit card balances, making on-time payments, and correcting any errors on your credit report.
Save for a Down Payment
Lenders typically require a down payment of at least 3-5% for FHA loans and up to 20% for conventional loans. Travel nurses should aim to save as much as possible to reduce their loan-to-value ratio (LTV), which can result in lower interest rates and monthly payments.
Organize Employment Contracts and Tax Returns
Due to the nature of your work, you’ll need to provide extra documentation to prove your income and job stability. Keep copies of all contracts, pay stubs, and tax returns for at least the past two years to show lenders that you have consistent income.
Final Thoughts on Securing a Mortgage as a Travel Nurse
Travel nurses face unique challenges when applying for a mortgage, including variable income and employment gaps. However, by working with lenders that understand your profession and preparing the right documentation, you can successfully navigate the mortgage process and secure the home of your dreams.
Whether you’re looking for a fixed-rate mortgage with a low interest rate or a specialty loan that accommodates your unique income, there are lenders that cater specifically to healthcare professionals like you. By considering the lenders and tips outlined in this guide, you’ll be well on your way to homeownership in 2024.
FAQs on Mortgages for Travel Nurses
Q: Can I qualify for a mortgage if I have employment gaps? Yes, but it’s important to provide a clear explanation of any gaps and demonstrate job security moving forward with signed contracts or upcoming assignments.
Q: How can I improve my chances of securing a mortgage with variable income? Organize all employment contracts, pay stubs, and tax returns.