First home buyer tips for nurses
- Find a lender that understands your nursing income
- Put your overtime to work
- Avoid lenders mortgage insurance
- Use salary packaging to pay off your home loan
Are you one of the many Australian nurses regularly working overtime? If you've stopped to look at how overtime and penalty rates have impacted your savings, you might be closer to buying a first home than you think. The good news is, you can get your overtime payments assessed as part of your income.
If you're a nurse, these tips could help you buy a first home sooner.
Maximise your borrowing capacity
Not all lenders will include overtime and penalty rates in your income when assessing you for a home loan. Salary packaging is also treated differently, with some banks viewing it as an expense rather than a benefit.
“We understand health workers," says Mobile Lending Manager Paul Meilak. "We know that with overtime and penalty rates, a nurse can earn well above their base salary."
BankVic assesses health worker incomes differently to other banks.
"Unlike other lenders, we will consider up to 80% of your extra payments as part of your overall income," explains Paul.
For nurses using salary packaging, that part of your income is assessed as tax-free, which may further increase your borrowing capacity, Paul says.
Put your overtime to work
Some nurses get overtime paid in backpay, meaning a big chunk of money might land in your account every six weeks. You could consider setting up a savings account to put any extra money aside, to help you save up for a home deposit. Alternatively, when you're setting up your first home loan, you might choose to have all your surplus funds working to 'offset' your loan every day – this can be a great way to reduce the interest you pay while still having access to your money via a debit card.
Avoid lenders mortgage insurance
With BankVic, you can borrow up to 90% of the property value without needing to pay lenders mortgage insurance (LMI). "LMI can be really expensive. Avoiding it can save you thousands of dollars," Paul says. Using the Family Guarantee option is another strategy to increase your loan and avoid LMI.
Use salary packaging to pay off your home loan
Did you know you could use salary packaging to pay your mortgage? You can dedicate up to $9010 of pre-tax income a year to your mortgage repayments. "It's a great way to get your money working harder for you, in terms of what it saves you in tax," Paul says.
Find out how close you are to buying your first home. BankVic can look at your income and expenses to advise you on your borrowing capacity and the best loan for you.
Talk to one of our lenders by calling us on 13 63 73 or book a time with a mobile lending manager to find out how our lending products tailored to meet the unique needs of nurses and other health workers.
BankVic is proud to serve Victorians working in health, emergency services and policing.