Buyers can’t rent out their old house as easily

Editor,

In the past few months, I’ve had several clients who purchased a bigger home because they needed more space, and they considered it the right time to buy. In each case, they put at least 20 percent or better down, and their old property was rented out.

I have a few more clients like these now, but with the guideline changes, they can’t do the same thing because they need to have 25 - 30 percent equity to consider rental income. If they don’t have the equity, they need to qualify for the entire payment on all mortgages on all properties.

This is going to prevent a lot of responsible buyers from entering the market, slowing the real estate market recovery. The guidelines should be relaxed to include buyers with excellent credit history and a 20 percent or better downpayment.

If someone wants to rent their three bed/two-bath home and move in to a five-bedroom home, they probably cannot sell the former in the current market, but they can rent it out.

We all realize that some of them document the home as a rental and stop payments on that property, but their credit report should show if they’re risky borrowers.

I think responsible buyers who can help this market should not be left out.

Thomas Pullattu
Professional Realty & Mortgage
Sunrise

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