The Dream Home That Felt Just Out of Reach Because of High Debt-to-Income
Emma had spent years on the road as a travel nurse. She loved the adventure, the new cities, and the flexibility of her job. But after years of moving from one short-term rental to another, she was ready for something more—her own home.
She imagined a cozy space to return to between assignments. A place to make her own. Somewhere to build equity instead of handing over rent every month.
But when Emma finally sat down to get preapproved for a mortgage, the numbers didn’t look good. Her debt-to-income ratio (DTI) was too high.
The Unexpected Roadblock: High DTI and Mortgage Denials
Emma had always been responsible with her money. She paid her bills on time, kept her credit score solid, and never lived beyond her means. So when the lender told her she didn’t qualify for the mortgage she wanted, it caught her off guard.
“I don’t get it,” she said. “I make great money. I can afford a mortgage.”
The lender explained that it wasn’t about how much money she made—it was how her income was structured.
Like many travel nurses, a large portion of Emma’s income came from non-taxable stipends for housing, meals, and travel. That meant her official, taxable income looked lower than it actually was. When the lender calculated her debt-to-income (DTI), they only counted her base pay—not the stipends that made up nearly 40% of her earnings.
On top of that, Emma had student loans. Even though she was making payments on time, the debt was weighing down her DTI.
She felt stuck.
A Guide Appears: Mortgage Expert Paul Defngin
Determined to find a way forward, Emma reached out to Paul Defngin, a mortgage advisor who specialized in helping travel nurses and other professionals with unique income structures.
From the first conversation, she knew she had found the right person to guide her.
“Your situation isn’t unusual,” Paul told her. “Travel nurses face this all the time. The good news? There are solutions.”
Understanding the Debt-to-Income Ratio for Travel Nurses
Paul explained how DTI impacts mortgage approval.
“Most lenders want your total monthly debts—credit cards, car loans, student loans, and your expected mortgage payment—to be less than 43% of your gross monthly income,” he said.
Since Emma’s official taxable income looked lower than her actual take-home pay, her DTI appeared too high for approval. But Paul wasn’t worried.
“Lenders like The Yi Team with Vellum Mortgage Inc. understand how to work with travel nurses. We just need to document everything, have a clear narrative, and present your financials the right way. to the underwriting team to review and approve.”
The Strategy: Lowering Debt-to-Income and Strengthening Mortgage Approval
Paul walked Emma through a step-by-step plan to improve her chances of getting approved for the home she wanted.
1. Work With a Lender Who Recognizes Stipend Income
Not all lenders view travel nurse income the same way. Paul explained to Emma how they counted her stipend income for her conventional loan:
“Even though they’re labeled as ‘housing stipends’, if you have the discretion to spend this money however you want – and don’t need to turn in receipts or anything like that, then we would make a case for why it’s usable income.”
Paul went on to explain, “Fannie Mae says that when you get regular discretionary income for at least 24 months and expect to keep getting it, we can include it as qualifying income – no matter what it’s called.”
Her work history as a travel nurse showed she’d been getting these stipends consistently. And since they had documentation showing she had complete control over how to use these funds, they counted as legitimate income for her mortgage.
2. Paying Down Small Debts to Improve Debt-to-Income
Emma had a small car loan and a few credit cards with balances. Paul showed her how paying those off would significantly reduce her monthly obligations, lower her DTI, and also improve her credit scores.
“We’re not talking about huge payments,” Paul said. “Even paying off a small credit card with a $50 monthly minimum can make a difference.”
4. Writing a Letter of Explanation for Income Gaps
Since travel nurses often have gaps between contracts, Paul suggested writing a thorough narrative letter and providing detailed work history for the past 2 years through current. By providing a history of contracts and proof of consistent earnings, she could show lenders that she had steady employment, even if her W-2s made it look otherwise.
5. Getting Preapproved Before House Hunting
Rather than searching for homes first, Paul advised Emma to get approved. That means doing all the legwork upfront – the underwriting team reviews the file and gives their approval so that she could confidently make offers, and sellers would take her seriously too.
The Turning Point: Mortgage Approval at Last
Three months later, Emma’s financial picture looked completely different.
- She had paid off two small credit cards.
- Her stipend income was included in the loan calculations.
This time, when she submitted her application, the result was different. Approved. Emma could hardly believe it.
She had overcome the challenge of a high debt-to-income ratio, and now, she was finally on her way to owning her first home.
The Home She Had Always Wanted
Emma found a charming condo in a city she loved—a place to call her own. A space to unwind after long shifts, a home base between assignments, and an investment in her future.
As she held the keys for the first time, she couldn’t help but think about how different things would have been if she hadn’t called Paul.
Ready to tackle income variability and understanding how to make taxable income work for you as a travel nurse? Click here.
Are You a Travel Nurse Struggling with Mortgage Approval?
Emma’s story isn’t unique. Travel nurses across the country face the same DTI hurdles when applying for a mortgage. But just like Emma, you don’t have to navigate this alone.
Paul Defngin specializes in helping travel nurses get preapproved, even with high DTI ratios. He knows the programs and the strategies that work.
If you’re ready to create a customized home loan plan, call Paul today. Don’t wait until the perfect house slips away—get preapproved and take the first step toward homeownership.
Why Choose Paul Defngin and The Yi Team for Your Home Loan?
- Expert Guidance for Travel Nurses: Paul has extensive experience working with travel nurses, so he understands your income structure and can present your financial profile in the best light.
- Custom Loan Options: Paul will help you explore loan programs that match your lifestyle and financial goals.
- Streamlined Process: Paul’s team is committed to making the mortgage process as smooth as possible, so you can focus on what matters—your career and finding the perfect home.
- PDefngin@TheYiTeam.com | 240-447-2376
DISCLAIMER: Financial assistance programs are available on a first-come, first-served bases. Eligibility for assistance require meeting specific parameters and criteria. Program availability, terms, and conditions are subject to change. Not all applicants will qualify. Please consult with Paul Defngin to determine your eligibility and for complete program details.
SPECIAL ASSISTANCE PROGRAM DISCLOSURE: Down payment and closing cost assistance ranging from $15,000-$20,000 is made available through various state, federal, and private programs. This is not a committment to lend. All programs are subject to borrower and property qualification including, but not limited to: income limites, geographic restrictions, property type restrictions, and occupation verification. Programs, rates, terms and conditions are subject to change without notice. Additional restrictions may apply. Assistance amounts vary based on program eligibility and qualifications.
Paul Defngin NMLS #199791 | The Yi Team Mortgage NMLS #1657323 | nmlsconsumeraccess.org | Equal Housing Lender
Contact Paul Defngin at The Yi Team Mortgage to learn how we can help make your homeownership dreams a reality.