August 30, 2016
In addition to new government regulations, angry neighbors and the occasional orgy, hosts who rent their homes out on websites like Airbnb have something new to worry about. Lenders may be skittish about providing a mortgage or refinancing a home that produces short-term rental income from such companies. Traditionally, lenders have been clear on classifying loans for either principal residences or investment properties. But in the age of Airbnb, the line is becoming blurred, the Wall Street Journal reported. “This is kind of novel,” said Jeffrey Naimon, a consumer finance attorney and partner at law firm BuckleySandler LLP. “I don’t think the market has gotten its arms around it.” Some borrowers have been reporting income from websites like Airbnb and HomeAway when applying for a new loan in hopes of raising their credit profile and get a better interest rate. Instead the banks, which typically find investment properties to be riskier, have been telling borrowers they either no longer qualify for certain kinds of loans or will have to pay higher interest rates….
Source: http://therealdeal.com/la/2016/08/30/resi-lenders-think-twice-about-refinancing-an-airbnb-home/
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