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Title and Deed
Dear Edith: My husband and I recently paid off our home mortgage. Only my name is on the deed. I would like both of our names to appear on the title to the house, so that in the event of my death, my husband would clearly have ownership of the …Read more.
Making Lots on the Sale
Dear Mrs. Lank: I've lived in my house for 32 years and want to sell this year. I am widowed and understand that I will have $250,000 that will not be taxed from the proceeds. Am I required to pay capital gains on a portion of the remaining monies? …Read more.
Can't Kick Tenants Out
Mrs. Lank: I am interested in buying a condo that is currently rented out. The seller says that the lease isn't up until for seven months and therefore I couldn't move in until then. If I bought this condo, would I be forced to become a landlord? Or …Read more.
Did He Overpay?
Dear Edith: I bought a house this summer, and in light of the National Association of Realtors' admission that they've been overstating home sales since 2007, I'm wondering if that faulty data may have made me overpay for my house. — L.
Answer:…Read more.
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Reverse MortgageDear Edith: I am 70 and my wife is 68. We want to consider a reverse mortgage. Is this a good time (the economy the way it is), or should we wait for better economic times? We know that this mortgage is backed by the federal government, but how stable is our government? — G.R. Answer: I don't think I'll tackle your second question. But for the first: The state of the real estate market shouldn't have much to do with the decision, which depends on your particular situation and needs. At your ages, you do qualify. How much you can borrow depends on the value of your home and your life expectancy. Your credit rating and income don't matter because you won't be making monthly payments. Instead, you'll receive money, building up a gradual debt with interest against your home. You can receive a lump sum, a line of credit or a check every month. You don't make repayments as long as you live in the house. You remain the owners, and the money you receive isn't taxable because it's a loan. When you move out or die, the debt must be repaid, usually by the sale of the property. With the type of reverse mortgage that's backed by the Department of Housing and Urban Development, if the sale doesn't bring enough to pay the debt, the difference is covered by FHA insurance. Like any mortgage, this one involves upfront closing costs, but you don't pay them now. They become the first part of your mortgage debt. Other than that, the main drawback is that you would have less money to leave your heirs. You can find information at the AARP's website: www.aarp.org/revmort. Avoid those lenders who advertise "no monthly payments ever" without mentioning that the loan must repaid some day. Advertising half-truths make me nervous.
WORRIED ABOUT PROBATE Dear Edith: How can I leave my home to my daughter to avoid probate costs? Is there some type of trust? I have no other assets except this house, amounting to its present tax rate worth of $227,000. — M.A.W. Answer: A trust would probably represent needless complication and costs for you.
By all means, consult a lawyer about drawing up a will. That should do it. If you are married, your attorney can explain how that might affect your estate.
HOUSE WAS DUMPY Miss Lank: In 2008, we lost our home to foreclosure. My wife is still working with a good job and I am semi-retired in good health. Now we have another home. The owner wrote out a skimpy lease agreement — he will carry us for five years on a lease option to buy, while we try to get a loan. He said the money we use to upgrade the house will be our down payment. When we first looked at the home, it was in dumpy condition. We had the whole house painted before moving in. We spent between $5,000 and $6,000 to put in a showcase landscape. Our neighbors say our home went from the worst to one of the best in the neighborhood. There is still much to do on the inside, but it has a lot of potential. The owner tells us when things go wrong, like the air conditioning, you fix them because it is going to be your home. But it is not my home because I don't have a loan yet. I told my wife I think we should have a good real estate attorney write up and spell out in no uncertain terms what we do and what the present owner must do. We have lived here and paid every month on time for a year, but I am concerned. Will my wife and I be able to secure a loan to buy? And what if we can't? — R and M.S. Answer: The time to ask that question was before you signed that skimpy lease. Many precautions should be taken before you spend money improving someone else's property. By all means, consult a real estate lawyer promptly. Take along that lease so you can find out what you've committed yourselves to, and whether anything can be done at this point to protect your interests.
POOR CREDIT SCORE Hi: Two years ago, my credit score was 501 due to unpaid school loans and credit cards (that are in the process of being paid now). But my score increased significantly, if that helps. So, now I am wondering if a person with a credit score of 570 could be approved to get a mortgage with 100-percent financing for a house that costs $100,000? — e-mail Answer: Not a chance, sorry. Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com. COPYRIGHT 2009 CREATORS.COM
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