A little over a year ago, Airbnb partnered with some of the nation’s largest mortgage players, including Fannie Mae and Quicken Loans, to allow hosts using the short-term rental platform to use income from their rentals to refinance their mortgage.
Now, Quicken Loans is at it again; this time partnering with Vrbo, a competing short-term rental platform, to allow users of that platform to use rental income earned through Vrbo to refinance their mortgage.
According to Quicken Loans, borrowers can use income generated from offering their properties for rent as vacation homes on Vrbo to qualify for a refinance.
Typically, only rental income that comes from an investment property can be used when qualifying for a mortgage. Income from short-term rentals was not eligible to use in the mortgage underwriting process, although it should be noted that many short-term rental users use income derived from those rentals to pay their mortgage.
In fact, according to Vrbo, more than 50% of the site’s property owners use rental income to cover at least 75% of their mortgage payment.
And now, they’ll be able to use that income to refinance their mortgage as well.
According to Quicken, homeowners can use Vrbo income to qualify for a refinance as long as the rental income comes from a primary residence or a second home.
And, Quicken said that borrowers can use the Vrbo refi program on primary residences, vacation homes, and investment properties.
So, while the income has to come from a borrower’s primary residence or second home, they can use the Quicken Vrbo refi on other properties as well.
According to Quicken, it is the only lender that allows borrowers to use Vrbo income to qualify for a mortgage.
Quicken said that it is able to use the income generated from Vrbo rentals in the underwriting process thanks to confirmed and documented rental income information that comes directly from Vrbo.
“Homeowners’ Vrbo income that is used to qualify for a mortgage is accurate, real-time recorded data,” Quicken Loans said in its announcement. “They can get their earnings statements from Vrbo to share with their Quicken Loans mortgage banker.”
Quicken Loans CEO Jay Farner said that while the economy continues to evolve, it’s important for the lender to shift its lending criteria along with it.
“Vrbo helps homeowners use one of their biggest assets as a source of income. Now, Quicken Loans can accurately review that income and consider it when calculating the debt-to-income ratio – a major data point considers when qualifying for a mortgage,” Farner said.
“For Quicken Loans, innovation takes many forms,” Farner added. “From reinventing the mortgage process with Rocket Mortgage to finding new ways for credit-worthy, responsible homeowners to qualify for a mortgage, our priority is always thinking about how we can make Americans’ financial lives easier.”
Published at Wed, 17 Apr 2019 20:52:00 +0000