What percentage of equity in a rental must you have to qualify for another loan on a primary?
Is there a ‘rule of thumb’ for how much equity you must have in a potential rental property to qualify for a loan on a primary residence property? We’re having trouble selling our townhouse, so we’re considering turning it in to a rental. We do have some equity in the unit. If we try and rent it, is there a percentage of equity we would need to have in it in order to qualify for another loan on a primary residence??? Credit rating is good.
You will need a written lease agreement from a qualified tenant. The rent will need to cover the operating expenses and debt service.