Home-loan programs with no down payment
Q. I'm interested in buying a house. We don't have the down payment, and I'm not a military veteran. Your attention to this matter will be appreciated.
A. If one of you is in law enforcement, a firefighter, an emergency medical technician or a teacher of pre-K through 12th grade, look for a lender that handles the GNND, or Good Neighbor Next Door, mortgage program. Housing and Urban Development Department-owned homes are available with no down payment (well, a $100 payment), in essence financing the whole purchase price.
Otherwise, start saving.
Q. My grandson, who is a U.S. citizen, is planning to move back to the U.S. in the near future. He owns a home in Panama and is planning to rent it out if he does not get his asking price. I would so appreciate your expertise in convincing him this is a lose-lose idea.
I have been an avid reader of your column for many years and I know you have written a number of articles about how unwise it is to be an out-of-town landlord. Would you please forward a copy of one or more of your articles to me so I can hopefully convince him it would be best to take a loss if necessary and to sell before he moves back home?
Will you please let me know if there is a charge for your advice?
A. We'll have to assume your grandson knows more than we do about his situation and the real estate market in Panama, and I would hesitate to tell a grandson what to do - about anything - anyhow.
But you're right just the same. I do believe he's asking for trouble if he keeps ownership of an out-of-the-country house. Will he be paying a person or company or service there that will be ready to bring over a new hot water heater and install it immediately if the present one goes suddenly? Ready to run a credit check on would-be new tenants? Ready to meet a repairman when the air conditioning quits? Ready to judge when the place needs repainting?
Can he pay for professional management and at least break even, taking into account the money he'll keep tied up in the place?
My advice is almost always against investing in an out-of-town single house, and this one would be way out of town.
Sorry, I don't have copies of old columns. And as for your other question, the song that's running through my head (from which musical?) is "Good advice costs nothing, and it's worth the price."
Do let me know how this turns out.
Recently, I published a letter from a reader who wondered whether a lawyer's opinion of trouble-free title (ownership) at closing would be a sufficient guarantee, instead of the new owner paying for title insurance. I recommended paying for title insurance, which would be required by the lender in any event if there were going to be a new mortgage loan. This brought a lawyer's advice:
"I want to give you some direct comments about title insurance. As you know, I am an attorney, although I only do an occasional real estate closing, as I concentrate in other areas. When I do closings, the issue of title insurance sometimes comes up.
"My clients sometimes say this is a racket; they argue that couldn't they simply sue me, the attorney, as the party responsible if the title isn't correct? The answer is yes, but what if I am dead or judgment-proof (two possibilities I hope are not true)? Then such a remedy would be useless.
"Further, there are certain instances when a title issue arises for which the closing attorney is not liable - for example, if there is a fraudulent signature or some Native American claim. Additionally, banks require title insurance (no amount of arguing with them about this will relieve a borrower of this requirement), and the additional amount to protect the owner is not as much as if it were purchased separately.
"I often tell clients this is possibly the largest purchase they will ever make and it should be protected. I tell them that even though I am cheap, I buy title insurance myself when I have been involved in a purchase."
• Contact Edith Lank on www.askedith.com, or 240 Hemingway Drive, Rochester NY 14620.
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