On homes and real estate: Not too old for mortgage approval
Q. My husband and I are 78 and 75, and we would like to buy a second home in Florida. We would like to know if mortgage companies will refuse us for a 15- or 30-year mortgage because of our age. Can you please help us with this?
A. I’m happy to report that mortgage lenders are not allowed to take your age into consideration. All they’re interested in is whether you have enough cash on hand, if you pay your bills on time, if you have enough dependable income to carry the proposed monthly payments comfortably, and whether the property is valuable enough to act as security for the loan.
Q. My mother wants to gift her home to my sister and me equally, and my sister would pay me for half of the house. Mother is 89 and healthy, but she wants this settled now. What are tax consequences and liabilities? Mom currently lives next door in my sister’s house. Neither one pays rent to the other, but they do pay their own real estate tax and maintenance on their own home, and Mom’s home is paid for.
A. Particularly in a complicated situation like yours, there may be unexpected consequences concerning taxes, mortgages, your mother’s estate and the like. I can’t say strongly enough that your family should go together to a lawyer who specializes in estate planning or elder law. You can get advice about the best way to accomplish your mother’s goals.
Q. We are selling our house on our own, but we had many people came to the first open house and have already had two offers. The first offer is $230,000, but the buyer is asking for 6 percent seller help with closing costs. Buyer No. 1 is only putting down $1,500 to start and has nearly $35,000 in the bank. We’re sure that they can offer more.
The second offer is $235,000 with 3 percent seller help. Buyer No. 2 has also included a $1,000 escalation clause, so they’ll pay up to $1,000 higher than the current highest offer up to $247,000 -- $2,000 higher than our asking price.
What’s the best strategy to counteroffer in this particular situation? Are we required to inform buyer No. 1 that buyer No. 2 has included an escalation clause? Or do we let them know the amount of the second offer? We could see how much higher they’re willing to go -- knowing that buyer No. 2 will automatically “up the ante” by $1,000 up to their limit of $247,000.
A. Sounds as if you might have benefited from a broker’s services, both in setting your asking price and now in handling those offers. But even experienced brokers hate to get into bidding situations. Things can get messy.
I don’t give negotiating advice, but here are a few guidelines:
타 Don’t send out a counteroffer to more than one party at a time, since you could end up in legal trouble if both accepted. Put a time limit on any counteroffer. And remember that nothing is binding unless it’s in writing and signed.
타 You need not tell either buyer about the other, unless you want to. Just be sure you don’t lie to anyone. And never base your decision on discrimination forbidden by fair housing laws.
타 I trust you have investigated both would-be buyers’ financial situations -- credit rating, income and other debts. You don’t want to get your house tied up in a contract that ends up going nowhere because it turns out the buyer can’t get the necessary financing.
Reader tip:
I wanted to clarify one of the answers that was given regarding whether or not a reverse mortgage would work if a daughter is on the deed with her 86-year-old mother. I had written -- sorry, no, all owners must be occupants and 62 or older.
The daughter can have the property retitled into a life estate. Or the daughter can be removed from the deed, all with the guidance and counsel from a well-qualified, elder law attorney. That way, Mom can get the financial help that she needs, and the daughter will still inherit the property and whatever equity left after Mom no longer lives in the property, sells it or has passed away.
Her mother may live for another 10 to 15 years and can use the equity to maintain her standard of living, keep her taxes and insurance current or provide the funds for in-home health care, if it#146;s ever needed.
I just wanted to clarify that they do, in fact, have other options.
Answer: Thanks for the information. You#146;re not the only reader who wrote in pointing out that the daughter could transfer her share of ownership back to the mother.
타 Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.
2011, Creators Syndicate Inc.