Updated over 9 years ago on . Most recent reply
Rent from Roommates - How to handle in obtaining loan?
Lenders, Bankers, Mortgage Brokers:
How would you advise....I'm doing a version of House Hacking. I have 2 friends renting rooms in my home. They currently make deposits into my bank account or write a check each month for rent & splitting the electricity. I do not report this as income.
As I shop for conventional loans, would you recommend to continue this method of payment or should I have the payments made in cash in order to avoid any red flags that may arise due to the "unidentified" deposits?
Many thanks folks! Really appreciate the BP Community!
Most Popular Reply
Actually, there are lenders and Liam programs that will allow this income if you a.) have a rental contract and b.) report the income on your taxes. It's called border income. If you don't want to use the income for DTI purposes in obtaining your loan, I would still have written agreements in place with your roommates and I would still have them pay me with a check or money order and deposit them accordingly.