Dear Edith: If a house appraises lower than the loan amount what are the options? — D.W.

Answer: Let's assume the sales contract says the purchase is contingent upon (or depends on) the buyer's obtaining a certain amount of financing. Then, because of a low appraisal, the mortgage company won't make that big a loan. At that point it is sometimes helpful to request a re-appraisal.

Otherwise, the buyer can withdraw from the deal with the earnest money deposit being returned. That's one option.

Another is, if the buyer still wants the property and can afford it, for the buyer to make up the difference in a larger down payment. Or, the seller can drop the sale price to the appraisal amount.

Lastly, buyer and seller can negotiate a compromise: Seller comes down somewhat in price, buyer comes up with a somewhat higher down payment.

Back Taxes Due

Dear Edith: Can I still sell my home if I owe back property taxes? — D.S.

Answer: Certainly, but the buyer will probably require that those taxes be paid off at the closing. If not, the buyer will ask for credit at the closing, for the amount that will have to be paid later.

One On The Mortgage

Dear Edith: Do my wife and I both have to be on the loan together or can the loan just be in my name? Her credit is a lot worse than mine and I am the only source of income. — D.

Answer: You can place a mortgage on your own even if your wife is a co-owner. The only exception would be if you're looking for an FHA mortgage. For that one, all owners must sign for the loan and your wife's credit rating might make it difficult to qualify. With FHA you could simply buy the house with just your name on the title and mortgage

Divorce And Mortgage

Dear Edith: My wife and I are separated and planning our divorce. She wants to stay in our house that has a mortgage. I want my name off the loan. What do I need to do? — J.

Answer: You are right to be concerned, because just signing over your share of the house would not relieve you of liability for that mortgage.

If you could pay off the mortgage, that would solve the problem. Otherwise, though, two solutions are possible. One: Your wife refinances with a new loan in her own name only. Or, the lender takes your name off the present mortgage; sometimes they will agree to do that. Either way, though, your wife must have sufficient income and credit to prove she can handle the payments on her own.

If she won't be able to do that, then keeping the house is just asking for trouble. Both your credit and hers would be at risk in the future.

Make sure whatever you agree upon is completely settled before things are finalized. A promise or requirement in the divorce papers doesn't mean your mortgage company will cooperate. They don't have to obey a divorce decree.

Neigbors' Mess

Good afternoon: We live in a very nice area. The people next door moved in about two years ago and have done nothing but destroy the property with lots of toys, shovels, rakes, hoses, a dead tree, a mound of dirt that was never spread (long story but it was a court issue). The back yard is an eyesore.

For what is enforceable we contacted the city, but for the rest, there's nothing that can be done, or at least that's what the city says.

At some point we'll be putting the house up for sale and, unless we have the good fortune that they leave, we would like to know how much of a negative impact a trashy house will have on adjoining properties in terms of price, etc.?

What recourse do people have when they live next to the worst kept home within miles?! — Via e-mail

Answer: Not all that much.

Appraisers have a specific term, external obsolescence, for conditions outside the property line that detract from the value of real estate.

It sounds as if you've already used the legal remedies available to you. There isn't a lot more you can do.

Try making friends of your neighbors. This may be a challenge if you've already involved the city and the courts. But you want to be on good enough terms that some day, when you're ready to sell, you can talk to them frankly about how, while you're sprucing up your home for sale, you'd like to spruce up the neighborhood. Would it be okay if you came over to keep the lawn mowed, tidy the toys ... whatever?

Mostly, though, I'm afraid you're pretty much stuck.

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.

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