Quicken Loans and vacation rental company Vrbo are partnering to allow prospective buyers to use rental income on primary or secondary homes to qualify for a mortgage.
Despite rental income often accounting for a large portion of an individual’s revenue stream, in the past that individual could not use that income to qualify for a mortgage or refinance if the property was a short-term rental of their primary or secondary home. Previously, only rental income on investment properties was eligible to be considered.
“Vrbo helps homeowners use one of their biggest assets as a source of income,” Quicken Loans CEO Jay Farner said in a statement. “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.”
Through the partnership, individuals can use their short-term rental income earned through Vrbo to qualify for mortgages for primary residences, vacation homes and investment properties.
Income from Vrbo – a subsidiary of HomeAway which is part of Expedia Group’s portfolio of brands – is recorded in real time, so individuals can share earnings statements directly with their Quicken Loans mortgage banker.
Rental income and mortgage payments are often intertwined. A June 2018 market report from Vrbo found that more than 50 percent of short-term rental owners utilizing the platform use income generated from their property to cover at least 75 percent of their mortgage payment.
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“Homeowners who list their vacation homes on our marketplace have a unique financial opportunity to earn extra income,” Bill Furlong, vice president of HomeAway, Americas, said in a statement. “For the first time ever, homeowners can use their Vrbo rental income to be considered for a mortgage refinance, unlocking more value and financial returns on their property investments.”
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