US: North America’s largest mortgage lender, Quicken Loans, has strategically partnered with Vrbo.
The partnership will allow Quicken Loans clients to use any rental income earned through listing their vacation rentals on the Vrbo platform to be used to qualify for a conventional mortgage refinance.
The program utilises both confirmed and documented rental income so that homeowners can detail their full income stream more accurately. Mortgages for primary residences, vacation homes and investment properties are all eligible through the newly-launched program.
Typically, rental income can only be used to qualify for a mortgage when it is earned from a home that is considered to be an investment property, not a short-term rental. Through this program, homeowners can use Vrbo income to qualify for a refinance if the rental income is from a primary residence or a second home.
Detroit-based Quicken Loans claims to be the only lender that allows clients to use Vrbo income to qualify for such a mortgage.
Quicken Loans CEO Jay Farner said: “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.
“As our economy continues to evolve, it’s important that our lending calculations continue to evolve along with them,” he added.
Income through Vrbo that is used to be eligible for a mortgage is accurate, real-time recorded data. Homeowners can therefore get their earnings statements directly from the rental platform to share with their Quicken Loans mortgage banker.
HomeAway Americas vice president Bill Furlong said: “Homeowners who list their vacation homes on our marketplace have a unique financial opportunity to earn extra income. Over 50 per cent of Vrbo owners use their rental income to cover at least 75 per cent of their mortgage payment.
“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,” he added.
The linkup is the latest in a series of mortgage innovations.
Last year, Quicken Loans announced the launch of Rate Shield, a system which protects homebuyers from rising interest rates.
Through Rate Shield, buyers are able to secure their interest rate for 90 days without the need for a purchase agreement, so they can look for a home without worrying about up-and-down rates. Meanwhile, if interest rates go down, so does their rate.
Farner said: “For Quicken Loans, innovation takes many forms. 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.”
For more information, visit the Quicken Loans website here.