On homes and real estate: Help available to raise credit score

Q. My husband and I are hoping to buy our first home next year. By that time, we should have a savings of $25,000 to $30,000 to put down. Neither of us has had great credit in the past, although we have both been careful for the past three years. By June, we should be debt free, except for student loans and a car payment.

I am looking for resources, literature, websites, etc., to familiarize myself with the home-buying and mortgage process. Can you recommend any resources that would provide steps to maximize our credit rating as well as direct us to financing options for first-time buyers?

A. For help with your credit and general advice about home buying, consult a local nonprofit organization that’s government certified for housing counseling. Look in the yellow pages for HUD-approved agencies or visit www.hud.gov, which can help you find local organizations.

The National Foundation for Credit Counseling’s website (www.nfcc.org) also lists legitimate resources. And at your public library, a librarian can help you find books on home buying. Just keep an eye on the date of publication. Since the real estate market changes quickly these days, you want up-to-date information.

Q. Please give me your comments on the buyer agreeing to take the mortgage assignment when selling your home. In other words, he agrees to make the payments on the mortgage. I know the seller would still be liable if the mortgage payments are not made.

This may be a solution for a homeowner who is facing foreclosure and has little or no equity in the home. Some homeowners are doing this and have good results so far.

A. Does the new owner negotiate with the lender to assume the mortgage, proving financial qualification to do so? In that case, particularly with FHA and VA loans, the original borrower is often relieved of any further liability. But if that’s not done, the lender usually has the right to call in the loan — declare the whole debt immediately due and payable upon change of ownership.

If nobody tells the mortgage company about the transfer, they may find out soon anyhow — perhaps when tax and insurance bills start coming in. Both parties take the risk that someone may have to pay off the whole mortgage immediately or face foreclosure.

Q. Got a rehashed question for you. No, it’s not the “one-time tax exclusion.” It has to do with removing an ex-spouse from the mortgage on a rental property.

Is refinancing the only way? Does the length of time since the divorce matter? Can I send the mortgage company a copy of the quitclaim deed, a copy of a decree of divorce and rental agreements to show I’ve been handling the property exclusively the last two years?

A. It’s my understanding that most lenders will agree to remove one name from the mortgage if the other borrower can prove (canceled checks?) that he or she has been making the payments alone and can prove financial capability to continue doing so. Your own lender is the place to inquire.

I’ve been giving this advice for years and would much appreciate hearing if it really works. And by the way, on that other perennial topic: that home sellers tax exclusion is no longer “one-time only.”

Q. I bought a house last December. According to the inspection, the roof has to be replaced. The seller agreed to pay for it, and we closed the deal.

Since they haven’t done it yet, I want to know if it’s possible for me to get another contractor to do the work and the seller pay the amount, as he agreed before.

Also, can I let the his agent know about this situation? Unfortunately, we had the same agent with the seller. What is the best way to handle this? How do I get the contract redone?

A. It’s not possible to have a contract redone. The time to do it was before you actually bought the property. Some of your purchase money should have been set aside and held in escrow until the roof was done.

It’s not up to the real estate agent to enforce legal agreements. I hope you have the seller’s promise about that roof in writing. Take all your documents to a lawyer who specializes in real estate.

Ÿ 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 email her at www.askedith.com.

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