Edith: We are moving to a rural area in another state. Last summer, we looked at houses there with a Realtor. She spent time with us and was very helpful and obliging, even with our uncertain timeline and limited budget.
Now we have decided to build on family land down there instead. It seems a shame she spent so much time and effort for us for nothing. Can you suggest something we could do for her? – e-mail
Answer: How about a gift certificate to a fancy restaurant? A handwritten letter of appreciation will also be welcome and may end up posted on the office bulletin board. Mention that once you live in the area, you may be in a position to recommend her excellent service to friends and family.
Co-signer and approval
Dear Edith: I bought my house about two years ago. I financially couldn’t afford the house on my own, so I had a gentleman co-sign on the loan. But now we are not together. If I decide to sell my house, do I need his approval? Does he also need to sign the paperwork to list the house? – K.
Answer: Being an owner of the house and promising to repay the mortgage loan are two different things. Evidently, your ex-friend did sign on the mortgage. But that doesn’t tell me whether he is named in the deed as a part owner.
You can find out by looking at your deed. If you don’t have that document, you can see it, or get a copy, from your county clerk’s public records office. And if it turns out that he is indeed a co-owner, then yes, you’ll need his signature to market the property and eventually to sign off on a new deed.
Don’t forget 203k
Hello, Ms. Lank: I was reading your answer to someone who couldn’t fix up her house enough to sell it. I have been a loan officer in the mortgage business for over 20 years and specialize in FHA 203k rehab loans. I am also a former employee of FHA.
The FHA rehab loan allows a person to buy a home in need of renovation and adds the costs of fix-up into the original mortgage. The fix-up starts no later than 30 days after closing, and it has to be completed within six months. This is a very good way for the person, who e-mailed you the question, to sell her house. – S.Z.
Answer: Thanks for the reminder about this excellent purchase-plus-rehab loan opportunity. As with all FHA mortgages, the paperwork and the actual loan itself come from a regular lending institution.
Taxes aren’t paid
Edith: Is there any way to get out of a home equity loan? When I got the loan, my land taxes weren’t paid. My husband was in an accident and hasn’t been able to work.
I called the bank to see if I could lower my payment. Three weeks later, the loan officer said they couldn’t do anything because my land taxes aren’t paid. What can I do? – L.M.Y. (disappointed in my bank)
Answer: Better try hard to pay those property taxes, or you are likely to lose your home in a tax foreclosure sale. If that happened, the bank would be left with no security for its mortgage loan. Regulations are much stricter nowadays, and lenders aren’t making exceptions as they might have done in the past.
Free lunch on the IRS
Dear Edith: We have lived in our home for 10 years now. By the end of the year, we are selling it and relocating to another state. If we move and buy a house while our present home is still on market, how long will we have to sell our home to avoid the capital gains tax? – D.H.
Answer: You’re thinking of an old once-in-a-lifetime law that hasn’t been in effect for a long time. These days, the Internal Revenue Service doesn’t care whether or not you buy a replacement residence. You qualify for the home sellers tax exclusion on your profit — if you’ve owned and occupied the property as your main residence for at least two of the five years before the sale.
There’s no longer any age requirement, either. The only other rule is that you can’t reuse this home seller tax break on the sale of another home more often than every two years.
The two of you can take up to a $500,000 profit on your sale, free of federal capital gains taxes. A single home seller could take up to $250,000.
It’s just about the only free lunch on the IRS that I know of. On the other hand, of course, a loss on the sale of your principal residence is not deductible.
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 [email protected].
