Can You Use a Colorado Mortgage Broker to Refinance Your Airbnb Rental?
If you own a short-term rental or vacation property in Colorado, you’ve likely felt the pressure of rising interest rates, seasonal cash flow changes, or the need for capital to make upgrades. The good news? Refinancing an Airbnb rental in Colorado is possible—and may be a smart move if you want to lower your monthly payments, free up equity, or restructure your investment for long-term gain. In this guide, we’ll break down how investment property refinancing works, what loan options are available for Airbnb hosts, and why working with a mortgage broker can make the process smoother and more profitable.
Can You Refinance Your Airbnb Rental in Colorado?
Own an Airbnb in Colorado? You may be wondering if you can refinance your property to take advantage of better terms, free up equity, or improve monthly cash flow. The answer is yes—refinancing a short-term rental in Colorado is possible. However, it’s important to understand that lenders don’t view these properties the same way they view primary residences. Because Airbnb rentals are classified as investment properties, they fall under a separate set of underwriting guidelines that are often more stringent and require deeper financial documentation.
Short-term rentals generate income, but that income can be seasonal or inconsistent. This variability means lenders often require higher credit scores, larger reserves, and lower loan-to-value (LTV) ratios when evaluating investment property refinancing applications. Despite the added complexity, refinancing can be a smart move for Airbnb hosts. You can lower your interest rate, switch from an adjustable to a fixed-rate loan, or access equity to fund upgrades, cover operating costs, or invest in another property. Some owners also refinance to consolidate debt tied to their rental operations, streamlining finances and boosting long-term profitability.
There are several vacation rental loan options available, but one of the most popular among Colorado hosts is the DSCR loan (Debt Service Coverage Ratio loan). Unlike conventional loans that rely on your personal income and employment history, DSCR loans in Colorado focus on whether your Airbnb rental generates enough income to cover the mortgage. If your property shows consistent performance and maintains a DSCR of 1.0 or higher (some lenders may require 1.15+), you may qualify without the need for traditional income verification. This makes DSCR loans ideal for self-employed investors, full-time hosts, or those with multiple properties.
To successfully navigate this process, it’s highly recommended to work with a mortgage broker for rental properties. Brokers have access to a wide range of lenders and can help match you with the right loan product based on your goals and property performance. They’ll assist with gathering Airbnb income documentation, analyzing your DSCR, and negotiating terms that improve your cash flow and return on investment. With the right financial strategy in place, your Colorado Airbnb can continue generating income while supporting your broader real estate goals.
A mortgage broker acts as an intermediary between you and potential lenders. They help you find and secure a loan that aligns with your financial goals and home-buying needs. Think of them as your personal loan shopper, comparing options to ensure you get the best deal.
Mortgage brokers are licensed professionals with expertise in the lending market. They work with various lenders, including banks, credit unions, and private companies, to offer clients a range of loan products
How Investment Property Refinancing Works
Investment property refinancing follows many of the same steps as a primary home refinance, but with a few additional requirements:
LTV Ratios (Loan-to-Value): Most lenders require more equity in an investment property—typically a max 70–75% LTV.
Higher Rates: Expect slightly higher interest rates compared to owner-occupied properties.
Rental Income Verification: Lenders often want to see tax returns or Airbnb income reports.
Reserves: Some lenders require 6–12 months of reserves (savings) in case of vacancy or emergency.
The right lender will help you balance cost, terms, and strategy—especially if you’re aiming to scale your real estate portfolio.
Mortgage Options for Short-Term and Vacation Rentals
When it comes to refinancing a short-term rental, traditional mortgage products aren’t always the best fit. Specialized vacation rental loan options offer more flexibility and focus on the income potential of the property rather than your personal income alone.
Loan options may include:
Conventional Investment Refinance Loans
Bank Statement Loans (using deposits instead of W-2s or tax returns)
Portfolio Loans from local banks or credit unions
DSCR Loans—a powerful option for Airbnb hosts
Let’s take a closer look at DSCR loans and why they’re increasingly popular in Colorado’s vacation rental market.
Using a DSCR Loan to Refinance Your Colorado Airbnb
A DSCR loan (Debt Service Coverage Ratio) is designed specifically for real estate investors. Instead of evaluating your personal income, these loans focus on whether the property’s income can cover the debt.
To qualify, lenders calculate your DSCR using the formula:
DSCR = Monthly Rental Income ÷ Monthly Loan Payment
A DSCR of 1.0 or higher usually qualifies you for a refinance—meaning your Airbnb earns enough to cover the mortgage. Some lenders require a higher ratio (e.g., 1.15 or 1.25), especially for vacation markets.
Why DSCR loans are great for Airbnb hosts:
No personal income verification required
Great for self-employed or multi-property investors
Faster underwriting process
Works well for seasonal income models like Airbnb
If you’re exploring DSCR loans in Colorado, a mortgage broker can help you compare programs and identify which lender aligns with your goals.
Why Work with a Mortgage Broker for Rental Property Refinancing?
Navigating short-term rental mortgage options can be complex—especially when income is seasonal, and the property isn’t your primary residence. A mortgage broker for rental properties brings added value by:
Comparing multiple lenders to find competitive rates
Understanding local zoning and vacation rental regulations
Recommending financing options that fit your goals (DSCR, portfolio loans, etc.)
Helping you gather the right documentation for rental income and occupancy
If you’re refinancing an Airbnb rental in Colorado, a broker helps streamline the process, reduce costs, and improve your return on investment.
Refinance Your Colorado Airbnb with Confidence
As the short-term rental market matures in Colorado, now is the perfect time to evaluate whether your current mortgage still works for you. Refinancing an Airbnb rental in Colorado can unlock equity, reduce your monthly payment, or position you for future property purchases. Whether you’re considering a DSCR loan, exploring other vacation rental loan options, or simply want to talk strategy, working with a local mortgage broker for rental properties ensures you get expert advice tailored to your unique investment.