How nurses can improve their borrowing outlook
- Get your income assessed accurately
- Salary packaging should improve your lending outlook
- Find the right loan offer
- Use overtime strategically
Shift work, penalty rates and overtime can all add up to excellent flexibility and often better pay for nurses. But it does mean your wage may fluctuate from week to week. How does that impact nurses when it comes to securing a home loan? Lenders can be quite strict when it comes to income testing. Fortunately, there is still a way to get a foot on the property ladder.
Assessing your income
BankVic treats nurses’ incomes differently when determining how much they can borrow. Based on year-to-date payslips, our lenders will consider up to 80% of your overtime and penalty pay as part of your overall income.
“Traditionally, we will ask for the two most recent payslips and this is often enough to establish nurses' year-to-date salary," explains Paul Meilak, BankVic Mobile Lending Manager. "Casual employees can also be eligible for home lending with BankVic. For casual nurses, we can also look at their past two annual group certificates to confirm their income stability over a longer period of time."
Salary packaging benefits
While some banks look at salary packaging as an expense, BankVic uses it to improve nurses' borrowing capacity. In fact, your salary packaged income is assessed as tax-free.
Melbourne nurse Ann recently refinanced a property loan with BankVic. “BankVic understands how salary packaging and overtime impact take home pay for health workers,” Ann says.
The ATO's pre-tax allowance for healthcare workers can be used on various expenses. Using salary packaging to pay off the mortgage is a great way to make tax savings while meeting your home loan commitments.
Find a bank that favours health workers
With BankVic, nurses buying their first home can borrow up to 90% of the property's value, without having to pay for lenders mortgage insurance (LMI). Avoiding LMI can save you thousands of dollars. Using the Family Guarantee option is another strategy to increase your loan amount without paying LMI.
Put your overtime to work
Some nurses get overtime paid in backpay, meaning a big chunk of money might land in your account pretty regularly. It's a wise idea to set up a savings account to put this money aside, to help you save for a home deposit faster.
Get in touch with BankVic to have your borrowing capacity assessed by a lender that understands nurses' incomes.
BankVic is proud to serve Victorians working in health, emergency services and policing.