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Can someone who is 85 get a 30-year mortgage?

Question: I'm renting a home from my father because I have bad credit. How do I protect myself from losing my home if he passes away? Are there any loans programs for me, someone with a 520 credit score?

Answer: Your father could elect to leave the house to you as part of his estate. Both you and your Dad need to have wills and living wills.

As to your credit standing, 520 is below the level many lenders will consider. Any financing available to you will be at a ridiculously-steep rate.

Your best strategy is to start a budget and to make a point of paying bills on time and in full. Over a period of 12 to 24 months you should be able to substantially improve your credit standing.

Question: My friend is currently renting an apartment in a three-family house. All the apartments have individual house numbers, but the landlord won't let her get a separate mailbox. All three tenants must share one mailbox. My friend offered to buy and put up her own mailbox, but the landlord said he would take it down if she did. Can my friend get a personal mailbox?

Answer: Is there another issue here besides the mailbox? For instance, is the property zoned for three units?

If your friend makes an issue of this it could result in bad relations with the owner -- not a good idea since everyone is under the same roof. But if a separate mailbox is hugely important, your friend could ask for guidance from the nearest postmaster.

Question: We own a home that cost $170,000 six years ago. It's worth $400,000 today. We're considering selling our home and buying a new home for around $470,000. I'm worried that when it comes time to sell that home it will be at a loss because the prices are so high right now. Many people were able to buy these over-priced homes because interest rates where so low. Will they ever be able to sell their homes and make a profit?

Answer: No one knows what the future will bring. You need to look at the community where the new property is located and consider its future. Is the population growing? Is the job base expanding? Does zoning restrict housing options?

As to today's "high" prices, it's good to consider that they are high relative to prices seen in most places in the past. Long ago, for example, a mansion could be priced at $100,000. Today, that price won't buy anything in some communities.

Part of the reason for higher prices is that we measure the value of homes in terms of cash. The buying power of cash is reduced by inflation so that prices appear to rise. If values rise more than inflation then real wealth is created. But if values rise only at the rate of inflation, then buying power remains stable.

Question: I would like to buy a house as an investment for my two sons, age 18 and 21. First I would like to know if it would be best to pay cash for the house or take a mortgage. I have the cash. The second question is since I'm in a higher income bracket than my children I thought I would put the property in their names. I plan to continue buying houses for them for use as rentals.

Answer: You're doing something which is very generous, but also something which requires planning.

To start, a house-sized gift raises questions of gift and estate taxes. Most probably, you don't want to make an outright gift. A tax professional or attorney can provide specifics.

There are different philosophies regarding such matters, but for what it's worth it can be argued that children are best served by not receiving such gifts outright. Instead, let them earn ownership in steps over a period of years. Require them to learn about repairs and maintenance, have them get real estate licenses, let them gain experience as managers, show them how to do taxes. They will need such skills if they are to manage or inherit a portfolio of houses.

Question: I have just came from my country and I'm planning on buying a home, but my concern is that the market will go bad and I'm not going to make money when I sell. I'm only going to be in the U.S. for two years because I'm in the navy and I travel a lot. All I really want is to make enough money to cover my rent and maybe a little extra cash so when I go back home I can take some money. Any advice?

Answer: It's usually a bad idea to be a short-term real estate buyer -- and two years is a short-term. While there have been some markets that have done incredibly in the past year such as Phoenix, AZ or Palm Beach, FL, there is no guarantee that such results will be repeated in those locations or anywhere else.

In your situation you likely will do best looking for the cheapest rental you can find.

Question: I lived in my primary residence for 20 months and was laid off, finding a job 100 miles away. I then rented my house out with the intention on returning home. I had to sell it this year (2 years after moving) and was told I owed capital gains. I was originally told the hardship rule applied since I left for a job. Can you help clarify this?

Answer: You did not use the property as a prime residence for two full years within the past five years. For this reason you do not qualify for a complete capital gains write-off on your profit.

However, under the safe harbor exceptions there is a distance exception if your place of employment moves more than 50 miles. This exception would allow you partial capital gains relief. For details, please see a tax professional.

Question: I have a real estate website and I would like to put the annualcreditreport.com link on my website. Can I get into trouble for this?

Answer: No. The site AnnualCreditReport.com was established under federal law. As the Federal Trade Commission explains, "Annualcreditreport.com is the ONLY authorized online source for you to get a free credit report under federal law. You can get a free report from each of the three national credit reporting companies every 12 months. Some other sites claim to offer 'free' credit reports, but may charge you for another product if you accept a 'free' report."

So yes, do your clients, customers and website visitors a favor and link to the site.

Question: I'm in an awkward situation. I signed a contract to buy a house with what was to be my future husband. There are no contingencies in the contract. A couple of days ago, I found out he has been cheating on me and is a lying sack of xk!z#. I do not want to purchase the house with him. The sellers have allowed me to back out of the agreement, as long as my ex still qualifies to buy the house. He is now saying he doesn't want to buy the house either. If we now back out, what happens? Is there any way to do something about this?

Answer: Will the two of you lose a deposit? Does the seller also have the right to sue for damages?

A contract without contingencies creates an enormous potential for liability. To the sellers, you are buyers. They may well have purchased another home or turned down other offers by agreeing to sell to you.

You need to speak with an attorney. Ask about the liability of your ex to you in the event there are financial damages such as the loss of the deposit, a suit by the owners for specific performance, legal expenses, etc. It may be that your ex will prefer to complete the transaction.

Question: Can someone who is 85 get a 30-year mortgage or is there an age limit?

Answer: Under the Fair Housing Amendments Act of 1988 the provision of mortgage financing cannot be denied on the basis of age. Lenders, however, can require that all applicants -- regardless of age -- meet the usual standards for income and credit needed for a given loan program.

There are people in their 80s, 90s and perhaps older who can easily qualify for a mortgage on the basis of their finances. The test in such instances is not the calendar, it's the ability of individuals to meet all applicable mortgage requirements.

Have a real estate question? Send your inquiry to Ask Realty Times. Because of the volume of mail received, Mr. Miller cannot respond to questions individually or privately. Published letters may be edited for space and style. For comments regarding other Realty Times articles, please contact individual authors by pressing here. For past columns in this series, please press Ask Realty Times.

This column is designed to provide accurate and authoritative information in regard to the subject matter covered. It is made available with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, or other professional services. If legal services or other expert assistance is required, the services of a competent professional person should be sought.
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