Airbnb has changed how many people secure lodging for long trips, but a recent report by the Wall Street Journal shows that it may now be complicating the process of refinancing. Some homeowners who have rented some or even all of their home out to lodgers have stated that their application to refinance their mortgage has been more difficult than those who are not a part of Airbnb. In fact, some refinancing applications have been denied, while other homeowners are charged interest rates that are significantly higher than average.
According to the report, lenders are often cautious when making refinance loans on properties used for Airbnb lodging because the service turns the private residence into what could be considered a rental or investment property. In the past, borrowers have been shown to be more likely to default on mortgages for rental properties than on those for their primary residence. While most homeowners who use Airbnb do live in the home and only rent out a room or a small portion of the space, lenders are still wary of making the refinance loan.
Many homeowners who apply to refinance their mortgage only learn about this extra caution when they submit their application and are later denied. In some cases, their additional Airbnb income is needed to refinance at the low interest rates that are currently available.
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