🏡 How to Get a Mortgage on an Airbnb Property| Daily Rates LIVE

🏡 How to Get a Mortgage on an Airbnb Property
Join us LIVE to review Daily Mortgage Rates and Learn how investors can finance Airbnb and short-term rental properties using specialized mortgage programs. We’ll explain how lenders evaluate STR income, occupancy rules, down payment expectations, and approval requirements. You’ll also learn how projected rental income can help with qualification. Watch a live example showing property value, Airbnb income, loan amount, and monthly payment. Perfect for investors looking to build or expand a short-term rental portfolio.
📌 Key takeaway: Airbnb income can be used to help qualify for financing through investor-focused loan programs.

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The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as thousands of Non-QM mortgage loan program variations using alternative income documentation! 

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as Bank Statement Mortgages...

Transcript

Speaker 0:12

Good morning everyone. Welcome to another episode here of Daily Rates. My name is Nicholas Hiersche with the Mortgage Calculator. We are a lender and broker in over 20 states. And we have hundreds of loan officers that would be happy to help you out with any of our scenarios we reviewed today. But what we'll go over today are the market updates, a lot of news today, changing the rate ecosystem here. And we'll review what that means for our live standard programs. We'll pull up our live rates for all of our standard programs. And then we'll review a deep dive example. Today we're going to be talking about Airbnb, short-term rental properties, one of our most popular requests here, as we do have a lot of investors interested in those properties. So let me go ahead and change my screen and we'll check out the rates for today. So again, as we do every day, we typically want to review the 10-year treasury yields when we're talking about interest rates. This is over the last five days. It has unfortunately gone up here. Green is up, uh, which is uh negative, but we're looking for lower rates here. And you can see today, uh, you can't even see behind my head, but you see, they've shot up recently this morning a lot of news with a hot jobs report that came in, which will negatively affect rates. So that's a pretty big jump. If we pull back over the last year, you see we're still not quite at the peak we were just a short time ago, a few weeks ago. And uh hopefully again we can turn this around and get it headed back in the right direction. But that's not the end of the world here. Let's see what that actually means for our live mortgage rates. So not much has changed this morning on our standard scenarios. If you go to our website, the mortgagecalculator.com, you can just click on the today's rates link at the top. It will show you all of our lowest rates for all of our standard programs using a simple scenario. We set up a one-unit single-family home, 500,000 purchase, 300,000 loan amount, corresponds to 60% loan to value, 760 estimated credit score, and an estimated 40% debt to income ratio. That's what we set here, so we can see the lowest rate options across the board and compare them all side by side. So, first up here is our conventional options for a primary home. What most people think of when they think of a mortgage, standard 30-year fixed coming in this morning, rates as low as 6.125, and final PR 6.389. So, again, not much change from yesterday, even though the news definitely is not in our favor. And if our customer doesn't qualify for a conventional for any reason, we typically want to explore an FHA option, which allows a little higher debt-to-income ratio, a little more leniency on credit issues, but does require upfront and yearly mortgage insurance. So the rate looks great, six uh 5.625 rate. But when you add the extra fees in there for the mortgage insurance, uh final APR comes in at 6.507, which is a little bit higher than conventional, which is pretty standard there when you're looking at them side by side. And for our eligible vets, active service members, surviving spouses, VA programs are amazing. You see VA coming in today, 5.625, lowest rate option, but with the much lower fees and costs overall, final APR comes in at 5.881. So definitely a lot better than FHA or conventional when you compare them side by side. And we do have USDA options for those properties in the rural areas of the country. So if the property is eligible and our borrower is eligible, these are good programs to consider. And USDA comes in today 5.625 rate. And the final APR with all the fees, 6.288. So if we're comparing that to uh FHA or conventional, it is a little bit lower. So maybe the best option for those scenarios where our borrower and property qualify. And now where we love to help our customers here at the merch calculators when we go outside of the box, outside of the standard, and utilize our non-QM, non-standard programs, where we can use alternative docs such as bank statements, 1099s, etc., in order to qualify the borrower. So if our borrower doesn't qualify using the standard documents required for conventional FHA, etc., we can switch over here to our non-QM options for primary home. Rates as low as 6.375 this morning, final IPR comes in 6.628. So just a touch above conventional to qualify our customer that would otherwise not qualify, which is pretty amazing. And we can use alt docs for investment properties. Rates today come in at 6.5, final IPR 6.831. And we want to compare that to conventional investment properties. Rates today coming in at 6.375 or conventional final EPR 6.693, which is lower than our alt dock option, which is pretty standard, but not lower than one of our favorite loan programs here, our DSCR. And we're going to be talking about that today as well. Uh stands for debt service coverage ratio, no income, no employment needed. We simply use the estimated rents from the rental property to determine a DSCR ratio if the property cash flows is a ratio that is over one, which is preferred, and what we set on all these scenarios. And we add a three-year prepayment penalty, which is pretty standard here for this first option coming in at 6.125 rate. Absolutely amazing. Finally PR 6.448, which is blowing conventional out of the water and is even better than our alt dock options. So typically the preferred option for our investors out there, and we could close in entities, LLCs, etc. And we can add a five-year prepayment penalty to sweeten the deal. Rates come in today at an amazing 5.875 for our five-year prepayment penalty. APR 6.193, which again blows conventional out of the water, which is amazing. And we have dozens of other options here on this page. If you scroll down, second mortgages, HELOCs, rehab loans, fix and flips, commercial loans, all kinds of options. But let's talk about our topic for today, which are short-term rental properties. One of the most sought-after requests, especially when we're getting our investors out there looking to utilize our DSCR loans. So we're going to use the same property we used earlier this week. This is a good example because it could be a good short-term rental property. Definitely says in the description, but if you notice it has two units, so it has a front home here, and you can't quite tell, but it has an ADU. So I did use this for another example earlier. But this would be a great example where an investor may want to use this property as a short-term rental. So this is just a property that's for sale in the area. $669,000 gives us a nice target here to run some numbers. Now, if our investor wants to utilize just short-term rents and just a DSCR program, no income, no employment, no extra documentation needed, we simply need to get an estimate of the short-term rents that will be achieved from this property. And we could typically use 75% of the estimated rents if we're able to get an analyzer from one of the websites out there that can analyze and estimate short-term rents, or we can use the actual. So if the seller of this property has already been using it as a short-term rental and they're cooperative, we could use 12 months history of their actual rents and use that with a typically a 75% factor. So a great way for our investors where we looked at this project earlier and it may not cash flow on a long-term basis. And so most of our investors would probably be looking to use short-term rents if they're going to look at this property. And so this is a great example. This is the best scenario I found this morning. So we can do 20% down for a DSER using short-term rents. And we added a five-year pre-PIM penalty this example. And as I mentioned before, we can utilize the estimated short-term rents or with the seller's permission, the actual rental history for the past 12 months. Now, a normal DSER purchase using long-term rents, we can go to 85% LTV or 15% down. However, if we're going to utilize short-term rental income, there is going to be a 5% LTV reduction. So unfortunately, the maximum we can do on a DSCR loan using short-term rents is typically 20% down. That does change from time to time. We may be able to find some special programs, but these are pretty much the standard options. And we did add a five-year prepayment penalty to make the deal amazing. And you see here the rates are pretty awesome. 6.125 rate has a 3.225 discount point costs. We can get the rate down almost into the fives. Absolutely amazing if we put 20% down. And a rate of 7% actually gets us 0.775 back in lender credits for its closing costs. So this is amazing rates here because we're putting a decent amount down. We're putting the 20% down in this scenario for 80% loan to value. And you see the other settings we had here was that five-year prepayment penalty. And we always use that 760 estimated five go credit score. So this is a great way for our investors to purchase this home, which probably won't cash flow with long-term rents. But you see here with short-term rents, we'll probably be able to attain a much higher amount than what we need here to cover the PI at least here. We'll need to add taxes and insurance, of course. But this would be a preferable scenario for short-term rental. Now for our investors that want to put the least amount down, I still have another option for that. So DSCR is preferred for most investors out there looking to do a rental property and short-term rental properties. But sometimes they need to put a little less down and want to utilize the 85% loan of value. So my recommendation is we always have options for 15% down as long as we add some income. So we can still do a business purpose loan, still close in an LLC, still operate a short-term rental business property. But if we're able to add 12-month business bank statements, is the most common request for our investors out there that still want to put 15% down, we can still utilize this as a short-term rental property, of course. And we did add a five-year prepayment penalty here in this example to get the best rates of pricing. But other than that, this is the best way to still utilize the 15% down option. Just add some notes here, just all the uh same details there that we need to use 12 months bank statements, and we will add the estimated rental income at 75% typically as income we can use for this loan as well. But we'll have some bank statement loan, some bank statement income to add to it. And now because we're putting less down, the rates are a little higher, but again, we're getting 15% down, which is pretty amazing for a short-term rental property. So 6.75 rate has a cost of 3.5 discount points, and we have a par or no cost rate here of 7.75 when we're putting that 15% down. So this is a great option for our investors that still want to utilize that 85% loan to value. In most cases, we're going to need to add some income. The most common income type to add is this business bank statement 12 months that we did in here. And again, we kept that five-year prepayment penalty to help improve the rates, and we can still close an entity or LLC, which is the typical request for our investors, especially looking to do short-term rents. So those are the two ways that I would recommend to set it up there. If our investors looking for a nice property, like in the picture here, short-term rents, definitely the most popular request. Again, we can still do 15% down as long as we're able to add some income. And we have tons of other income types we can add as well. And we can do full doc too if our customer qualifies full doc. So hopefully that helps anybody out there looking for a rental property or any of our standard programs. If you'd like a full breakdown, a full loan estimate of all the costs and fees for your exact scenario, please go to our website at mortgagecalculator.com. Any of our hundreds of loan officers would be happy to help you out. So I hope everyone has a great weekend. Good luck out there at home shopping. We'll be back next week with another episode of Daily Rates Life. Thanks everyone.