There are still mortgages offered with little down payment

Q. We have a pretty good credit rating but not much cash. My father-in-law says there are ways to buy real estate with little or no money down. Is that just in the past, or is it still possible?

A. Yes, there are still ways to buy your own home with almost no cash, especially for first-timers. Your good credit rating is a plus, and you'd need to show enough dependable income to handle monthly payments. It helps if you're inquiring about an area with moderate home values.

Are you familiar with mortgage brokers? That's "mortgage brokers," not "mortgage bankers." They bring borrowers and lenders together, and they're an excellent source of local information. It won't cost anything to consult one.

For starters, the U.S. Department of Agriculture offers no-down-payment mortgages in rural areas. Some places that qualify are really just suburban. Sellers can pay your closing costs, and any additional fees can be added to the amount borrowed. The program is great for first-timers with moderate income.

Veterans Affairs loans, VAs, are available to those with two years' military service, or 90 days if still serving. They require no down payment and charge no mortgage insurance.

Federal Housing Administration loans usually require at least 3.5 percent down payment, but you are allowed to receive that as a gift, from parents or certain other sources. In addition, the FHA Good Neighbor Next Door program allows public employees like teachers and police officers to finance with just $100 down.

Placing a mortgage also involves closing costs, which can total several thousand dollars. Many mortgage plans allow the seller to contribute to those. You might want to stipulate that in a written purchase offer.

Some locations offer other government-backed programs for first-time buyers. Again, a mortgage broker will know if anything is available. For that matter, an experienced real estate agent should have information about local resources, and it won't cost anything to consult one.

Good luck!

Q. We are trying to refinance our second home. Does the bank have a right to put a lien on the house we are living in now or our other properties?

A. I'm not a lawyer, but I can think of two ways a lender could put a lien (a financial claim) on your properties. If you failed to repay a loan as promised, I believe the lender could go to court asking for a claim against some other of your assets.

That probably isn't what you're asking about. Beyond that, the only way the lender could file a lien on your own home, or on your other real estate, would be if you gave it written permission to do it - in return, usually, for a loan.

From your note, it's difficult to understand just what you're asking, but it looks as if you own several parcels of real estate. If that's the case, you should already have your own lawyer and accountant on hand for advice.

Q. We aren't ready to buy a house yet, but we're looking on the internet. Are there guidelines about how much we can afford to buy?

A. Yes, and they're all over the place. Much depends on whether you have other long-term debts like car loans.

With no other monthly payments to make and excellent credit, you might buy a house worth as much as four times your annual income. If, on the other hand, present debt payments take almost half of your income, you'd better just continue renting.

In between those extremes are formulas for how much mortgage borrowing you can afford. Real estate agents will start by prequalifying you - asking a lot of personal questions about your finances to estimate how big a loan you should be able to handle.

Your written offer to buy a home, though, will be particularly attractive to a seller if you've been not only prequalified but also preapproved by a lender. With preapproval you'd have their firm offer to lend a specific amount - assuming, of course, that interest rates stay the same and you don't change your present debt burden before the purchase.

For preapproval, you'd have some expense, but it is a nice bargaining chip that's welcomed by sellers. And while you're negotiating, neither you nor your agent needs to divulge the highest amount you could borrow if necessary.

• Contact Edith Lank on www.askedith.com, or 240 Hemingway Drive, Rochester NY 14620.

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