Any way around needing 2 years of rental income to be qualified..

[Rebecca Cramer]

Hi everyone! I need help and FAST! We want to put an offer on a house tomorrow! You know how deal pop up and you got to act fast! So I'm trying to get qualified for a mortgage but the main source of income is our short term rental property that we have only had since March but we have made a lot of money on it..hence the $$ for another property! The 1st rental property was in my husbands name. This one we wanted to put in my name as a second home so we don't have to put 20% down and have a lower interest rate. The only thing is my regular job as a nurse I don't make enough to cover the cost of our primary residence mortgage and the second home mortage on paper. I can only do this because of the rental property. We are going 50/50 with my parents who also don't have a second home. What can I do? Put our primary residence in my husbands name? Any way around needing 2 years to use the income I have made through airbnb?

[Greg Scott]

Rebecca:

There are actually a lot of potential solutions but each will require some work to investigate.  Here are some ideas for you:

• Talk to a investor-friendly mortgage broker and run him through the different scenarios of how family might be able to help you buy this. Depending on income vs liabilities, there may be some combination that works.  Banks usually like cookie cutter mortgages so find someone that knows how to work creatively.
• Consider a private mortgage.  If the property is a good investment, you may be able to pay above-average interest to a private lender.  Say, 8% for example.  It should be easy to find someone to give you a 2 year loan at 8% and by that time your income will qualify for a refi.  Perhaps your parents or rich uncle would like an 8% return.
• Seller financing.  Perhaps the seller themselves will finance the house for you, depending on their situation
• Hard money.  This is the same as private lending but a true hard money lender will demand higher interest and often points so I would only look to this route if the AirBNB rental is very profitable.  I've paid as high as 14% and 2 points, but that was a few years ago.  But, if your investment makes 25%, you can swallow the high interest for a time period until you can re-fi into a conventional loan.

Keep pushing!  There is a solution out there.