Dear Edith: I had a question about money when buying a house. My fiance and I are planning on buying a house next year at the earliest (after we're married and all). We will only have his salary. We were told it's not possible to buy a house on his salary alone. I am planning on being a homemaker/stay-at-home mom so me working is not going to happen. Does that mean we'll never own a home? I know people that have bought a home without having two salaries so I don't understand. — D.W.

Answer: Of course a couple can take out a mortgage loan based on one salary alone. They must have enough income, though, to make the monthly payments comfortably. You'll be able to buy when your husband earns enough to qualify and you've limited your house-hunting to something you can afford.

Foreclosure And Taxes

Ms. Lank: I used to own two houses. One house already was foreclosed. The second will foreclose soon. My concern is how much tax or penalty do I have to pay the IRS? The bank hasn't given us any paperwork after the first house was sold at auction. — via e-mail

Answer: The IRS used to tax you on what they called "forgiven debt." The idea was that your mortgage loan wasn't taxed when you received the money, because you were going to pay it back. If you didn't, taxes were then due on the unpaid balance after a foreclosure auction — the last thing you needed at that point.

In response to the current mortgage crisis, however, that tax has been lifted. It won't be due on any shortfall from foreclosures or short sales for 2007 through the end of 2009. So at least you don't have that to worry about.

Pre-Approved — Now What?

Dear Edith: We got pre-approved for a mortgage, found a house, handed in all my paperwork to the bank and are now waiting for approval to move in. What would change their mind to approve me? — J.

Answer: A last-minute change in your credit record could affect your mortgage qualification. This is not a good time to take out a car loan, for example.

In addition, even if you're approved to borrow, the property you want to buy must also qualify. The lender's appraisal will show if it's worth enough to serve as security for your loan.

Things Aren't So Great

Hi Edith: My boyfriend and I bought a house together in January. We have both our names on the house and we are using both of our credit, but now things aren't so great and I want to remove my name from the house. How do I go about doing this if he doesn't want to sell the house? — via e-mail

Answer: You and your friend are both owners, and also you are both individually responsible for the whole mortgage debt.

Removing your name from the house is easy. You just sign a new deed turning over your share to the boyfriend. He becomes the only owner.

Removing your name from the mortgage, though, is not easy and not always possible. Discuss this with your lending institution. You could end up with no ownership but still liable for the loan.

If your boyfriend doesn't want to sell, you do have the "right of partition." You can go to court and ask for an order that the house be sold at a public auction. But such a forced sale may not bring enough to pay off your loan, you'd have legal costs and it could leave you both owing money.

A letter from your lawyer might be enough to persuade your co-owner to put the place on the market in the normal fashion. Probably, though, you'll both end up losing if you sell so soon, given the costs of buying and selling.

Try to solve this as quickly as possible, because your credit record may be at risk, now and in the future.

VA Loan On Option

Mrs. Lank: I have an individual willing to sell me a house with a "Lease Option" or "Rent to Own." My credit is bad but I can afford the monthly payment. I have a G.I. Bill that I have not used. Is it possible to have the owner carry the loan and have my guaranteed home loan from the government signed over to the owner of the property? — via e-mail

Answer: The Veterans Administration would guarantee a loan for you, but it must be through a regular lending institution. It won't be of any value with a lease-option or land contract, and it won't work with a private lender.

I don't know how bad your credit is, but for some VA mortgages, you need to show good credit records for only one year back. Perhaps if you cleaned things up you could qualify for a regular mortgage. Talk it over with a mortgage broker.

If you do go into a lease-option or rent-to-own, don't sign anything until you have shown it to your own lawyer. Those are complicated contracts, and you must make sure your interests are protected.

Hasn't Closed Yet

Edith: Question: If seller has accepted offer, but closing has not taken place and there has been no transfer of title yet, is seller still obligated to go through with the sale? — M. W.

Answer: When there's a valid contract of sale, both parties are legally bound by it. The seller who wants to back out should consult an attorney to find out what the consequences might be. The buyer who expects trouble should consult an attorney to explore the available remedies.

Because every parcel of real estate is unique, money damages alone might not compensate a disappointed buyer. For that reason the law offers buyers the opportunity to sue for "specific performance." A court could order the seller to live up to the terms of the contract and turn over a deed.

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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