Bob Bruss

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Buying and Selling Real Estate
Hosted by Bob Bruss
Syndicated Columnist
Friday, March 30, 2001; 1 p.m. EST

Buying a house -- or even thinking about buying one -- is a complicated process, particularly if you haven't done your homework. What should you look for in a piece of real estate? How do you get the best financing? And how is the process different when selling property?

Bob Bruss has been taking the mystery out of buying, selling and financing real estate for 26 years with his weekly syndicated "Real Estate Mailbag" column. Bruss also writes "Real Estate Notebook," "Real Estate Law and You" and the "Real Estate Book Review" features. In addition, he writes two monthly real estate newsletters and is the author of the books "The Smart Investor's Guide to Real Estate" (Crown, 1985) and "The California Foreclosure Book" (1992). He was online to answer your questions Friday, March 30.

The transcript follows.

A native of Minneapolis, Minn., Bruss is a real estate lawyer and broker in California. He holds a business degree from Northwestern University in Evanston, Ill., and a law degree from the University of California's Hastings College of the Law in San Francisco. Bruss has taught real estate law at the College of San Mateo and for the the University of Southern California's College of Continuing Education. He has owned investment properties in California for more than 33 years, gaining experience in renovating old fixer-up houses, which became his hobby.

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

Arlington, Va.: Is it just me or have the escalating prices in the area led to some real dumps coming on the market at high prices? Is that what leads to overpricing or perhaps deflating prices?

Bob Bruss: You are correct. Many home sellers who missed the market peak in 2000 think they can still get those high prices today. But homebuyers in the marketplace today are very savvy. They are shopping and negotiating very hard since they are not competing with multiple offers from other buyers. There are many overpriced homes today that will languish on the market since there are fewer buyers searching. However, with low mortgage interest rates, more buyers are coming into the market as they realize this is a good time to buy with low interest rates and lots more inventory than last year.

Northern Virginia: Mr. Bruss:

I have a 1971 Cape Cod, 1,600 square feet, four bedrooms, two baths and a garage. No updates have been done. How do I make sure that I do NOT overimprove my house? I want to do certain things I know will be worth it, such as remodel the kitchen and baths, but I don't know how to go about making decisions such as whether to screen in the patio, etc.

Thanks,
Nancy

Bob Bruss: If you plan to stay in your home at least five years, make the improvements YOU want for yourself and your family. Don't worry about whether or not they will be profitable improvements. Kitchens and bathrooms usually return at least their renovation costs over the first five years after the work is completed. However, room additions, such as a family room or additional bedroom, rarely add as much market value as they cost. To avoid overimproving for the neighborhood, visit Sunday open houses of nearby homes for sale. Look around to see what features those comparable homes to yours have. For example, if there aren't any swimming pools in your neighborhood, adding a swimming pool to your home would probably be an unprofitable improvement which will add little or no market value to your home. When looking at nearby comparable homes, see what features have been added, if any. To illustrate, recessed lighting seems to be popular, although it is questionable how much value it adds. But it could improve the saleability of the home.

Mayo, Md.: The laws of economics say that every "market bubble" must eventually burst. Do you see the red-hot reality market in the D.C./Baltimore areas bursting any time soon?

Bob Bruss: I wouldn't expect a "bubble burst" but perhaps a return to a more rational home sales market. With the economy slowing and people worrying about their jobs, they will be less eager to buy the more expensive homes. Of course, the low-end "affordable homes" continue to have very strong demand, especially due to declining mortgage interest rates. But the expensive often over-priced homes will probably languish on the market for longer selling times, perhaps 90 to 180 days on the market. Have you noticed the price reductions recently? I have. Also, newspaper advertising of homes for sale, especially Sunday open houses, has increased. That means the home sale market is slowing. But I don't expect the bubble to burst anytime soon.

First-time Buyer in Washington, D.C.: I am a DC resident who is looking to buy a one- or two-bedroom condo. I am a first-time buyer, have OK credit and a very good job, but not much money to place as a down payment. Can you suggest some tips and/or resources I can review to start the process of taking a possibility and making it a reality?

Bob Bruss: Before you start shopping for a condo or house, get pre-approved in writing for a mortgage. Then you will know what price range you can afford. Fannie Mae and Freddie Mac offer very low and zero down payment home loans (but the interest rate is higher than if you can make a 5, 10 or 20 percent down payment). If your credit is "blemished," Countrywide offers a zero down mortgage up to $500,000 for home buyers with less than perfect credit. After you are pre-APPROVED (Not just pre-qualified) in writing by an actual lender, then you can shop with confidence for a condo or house.

Arlington, Va.: Is there any way to get over the feeling of failure if you're one of those like myself who never has bought a home and maybe never will? I feel like I've failed, yet I never found anything I wanted to buy or could. Thanks.

Bob Bruss: If you have a good rental situation that you enjoy, stick with it. But the major drawback is that after years of renting you will have NO home equity and just a pile of worthless rent receipts and cancelled rent checks. As I suggested to another reader, get pre-approved for a mortgage in writing first. Lots of lenders are eager to pre-approve you. Maybe after you have a lender's pre-approval letter or certificate, you will have more home buying confidence. Also, start religiously going to weekend Realtor open houses to see what is available on the market. Some home buyers take six months or even longer to find the home they want to buy. However, please be aware the perfect home doesn't exist. Just try to find one which meets most of your requirements.

Reston, Va.: I am looking to buy my first home in the next year or so. I am currently living with my parents in order to save up the down payment. I currently have enough to buy about a $150,000 house (but with nothing left over). I know the mortgage rates are very good right now, but I had planned to wait until this fall or next spring, when I have some more money saved up. Do you think it is a mistake to wait?

Bob Bruss: After you are pre-approved in writing for a mortgage, start looking for a house to buy now. Don't be in a hurry to purchase. Take your time. Spring is a great time to sell a home. But it's not such a great time to buy a home because there are usually lots of competitive buyers in the market. Look at lots of Sunday afternoon open houses so you'll know the right house for you when you see it. I have a real estate investor friend who has a "100 house rule." He says nobody should buy a home until they have inspected at least 100 houses! I think that's a bit too high, but visit at least 25 houses before making a purchase offer.

Rockville, Md.: If the title search does not reflect any easements of encumbrances, can a county require an easement for water anyway?

Bob Bruss: If the county wants to obtain an easement for a water pipe over your property, you must be paid for granting that easement to the county. However, if you refuse, the county can condemn that space needed by its right of eminent domain. Either way, you must be compensated for the water pipe easement which was not already recorded against your title when you acquired your property.

Washington, D.C.: Bob,

How does a credit score of 660 rate in terms of obtaining favorable mortgage terms?

Thanks!

Bob Bruss: A FICO credit score of 660 is very good. Anything below 620 is questionable, requiring review. But with 660, you should be able to negotiate one of the lowest interest rates. Shop around. Not all lenders are created equal. If you don't like the rate and terms quoted by one lender, go to another one down the street. However, be sure to get your mortgage pre-approval in writing from the actual lender, not just a pre-qualification from a mortgage broker.

Baltimore, Md.: Is it realistic to hope for a low mortgage rate with no points (and therefore a reasonable monthly payment) on top of a low down payment deal? We'd like to take advantage of some of the zero-down or 3 percent deals out there, but would hate to have points and PMI tacked on, increasing our monthly payment considerably.

Bob Bruss: If the mortgage exceeds 80 percent of the home's purchase price, the lender will usually require PMI premiums. However, if you can come up with 5 or 10 percent down payment, some lenders (such as Wells Fargo and Countrywide) will give you an 80 percent first mortgage and a 10 or 15 percent second mortgage or home equity loan so you can avoid the PMI cost. If you pay one or two points, you'll get a lower interest rate and those points are tax deductible interest on a home acquisition mortgage up to $1 million.

Falls Church, Va.: Hi Bob,

I'm closing on a condo I bought directly from seller. I was preapproved for a mortgage, had an attorney review the contract, and things are going smoothly. What are the pitfalls of buying without a real estate agent?

Bob Bruss: If you had a good buyer's agent, he or she could negotiate on your behalf with the seller. Also, the buyer's agent would prepare a CMA (comparative market analysis) before you make a purchase offer so you don't offer too much. The CMA shows recent sales prices of comparable condos nearby. Also, a buyer's agent would gather the condo paperwork such as CC&Rs, minutes of the last six months of board meetings, and financial statements. A good buyer's agent could warn you if the condo complex has a good reputation or if it is "troubled" with problems such as construction defects and a divisive board of directors.

Ashburn, Va.: I own a townhouse in Ashburn, but have determine that I don't want to live that far out of the city. I would like to move to Arlington, but would like to rent for a a year or so before I buy a condo in that area. Should I sell the townhouse now while the market is hot, or should I rent out the townhouse until I decide where I want to buy?

Bob Bruss: If you are 100 percent certain you want to sell the townhouse, today would be an excellent time to do so. Then you could move to an Arlington rental to see if you like the area as much as you think you will. The ideal situation would be to lease with an option to buy in Arlington so if you like the condo, then you can buy it. When inspecting condos in Arlington, as the owner if he or she will lease with an option to buy. More details are in my special report "How to Buy or Sell Your Home (or Investment Property With a Lease-Option" available for $4 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or www.bobbruss.com.

Reston, Va.: Hi, I have a bit of a problem that my real estate agent can't seem to help with. I signed a contract on a house and am set to move in two weeks from today. The problem is that the current tenants of the house (owner lives in Colorado) are refusing to move until a week after closing! They have problems with the landlord; they say they need the extra week to move, etc. I'm so frustrated I could scream -- all the plans to move in/close etc., are up in the air. My agent says there is nothing to do and eviction would take too long. Is he right?

Bob Bruss: Yes. If I were in your situation, I would delay the closing until the tenants are out. If you close and take title, they become your tenants and your problem. You will then have to give them a notice to move and, if they are "pros," they can stall you months before the court orders them evicted. If the tenants haven't moved out when they say they will, you should contact an experienced real estate attorney. Before the closing, you've got all the leverage over the seller. If you close with those tenants still in the house, you have zero leverage.

Rockville, Md.: I am interested in purchasing a home in Olney, Md. There is a lot of undeveloped land nearby. How can I detetermine what development is currently planned for the undeveloped land? I want to make sure that any development of the land does not adversely affect my property value. In particular, I am interested in knowing whether any new shopping centers or parks are planned. In addition, I would like to know whether any subsidized housing is planned.

Bob Bruss: Visit the planning department at the Rockville City Hall. Talk with the folks there. They can at least show you the general plan for the vicinity. Of course, there's no guarantee the zoning won't be changed in the future. But at least you'll know what is currently planned and allowed by current zoning.

Silver Spring, Md.: I just purchased a home two months ago. I plan to get married in November and wish to add my husband's name to the deed. He will then assume half the responsibility for the mortgage. What process should we expect from the mortgage company to add his name?

Bob Bruss: If I were you, I would not notify the mortgage company because they might try to extract an assumption fee or, worse yet, rewrite the entire mortgage and charge fees. AFTER you're married, you can execute a quit claim deed from yourself to yourself and your new husband, probably in joint tenancy or however you want to hold title. Consult a local real estate attorney who, for a low fee, should be able to prepare the title transfer to add your husband' s name to the title after the wedding.

Arlington, Va.: No doubt the question everyone wants answered is how long will this crazy seller's market last? Any prophesies?

Thanks for your insight in your column.

Bob Bruss: In many parts of the nation the seller's market has come to an end and we're in a relatively-balanced buyer's market (meaning there are more homes for sale than there are qualified buyers). More and more homes are coming on the market for sale so the inventory shortage (except at the low end, of course) is abating.

McLean, Va.: Is this a buyer's market or a seller's market? Is this a good time to buy a first home, even if it means starting out with less of a down payment than if we were to wait and buy in a year when we have saved up more money?

Bob Bruss: It's always a good time to buy, but at the buyer's price and terms. If you can't buy a house or condo that you like at a price you can afford, keep looking. In some highly-desirable neighborhoods, it's always a seller's market (meaning more buyers want to purchase than there are homes for sale). But in less desirable neighborhoods, it might be a buyer's market with more homeowners wanting to sell than there are buyers wanting to purchase in that neighborhood. Your first home will not be your ultimate dream home. But the important thing is to get started building home equity (instead of a worthless pile of rent receipts). If you wait to buy a home while you save more of a down payment, chances are homes will continue to appreciate in market value by the customary 5% annually. Can you save that fast? Probably not. Even if you buy with zero, 3% or 5% down payment, get started with home ownership. But take your time. Don't rush. Look now but don't buy until you spot a home you really want to own. Late summer, especially on a hot July or August day when all the other buyers are inside their air conditioned apartments, could be an excellent time to buy. But start looking now so you know what you really want in a home.

Lake Ridge, Va.: Mr. Bruss, Always enjoy reading your column in the Saturday Post. Contrary to some belief, it's still a seller's market here.

My neighbor saw a home for sale with a price of $169,000. Before she could place a contract on it, the seller had six. The house went to the highest bidder at $179,000.

Granted, this isn't an expensive home, but it did demonstrate a seller's market.

Bob Bruss: That price range you mention is very affordable. That's why there are more buyers than sellers. But in the higher price ranges, I think it's becoming a buyer's market because lots of homeowners are hesitant to "move up" to better homes. However, today's low interest rates are very tempting.

Maryland: My husband and I are getting ready to refinance and have been looking at a 30/7 balloon payment mortgage with a refinance option. The rate is half a point lower than the conventional mortgage, and we're pretty certain we won't still be in this house in seven years. Is there any reason we shouldn't go with that option?

Bob Bruss: Very few borrowers are taking adjustable rate mortgages today. The reason is the discount, such as the one-half percent your lender is offering, isn't worth the risk for borrowers who plan to stay in their homes a long time. Be sure your ARM doesn't have negative amortization. That means your payment is fixed for seven years, but the interest adjusts monthly and any unpaid interest is added to the principal balance. "Negative am" as it is called is bad news!

Alexandria, Va.: We will be moving out of the area in the next few months and are beginning to get our townhouse ready to sell. With the market being as hot as it is, do you recommend using a real estate agent or selling by owner? Our neighbors just sold their house last weekend after two days on the market for more than the asking price and said they did most of the work since they received three bids before the open house. Why is it worthwhile to use an agent?

Bob Bruss: In a seller's market, it's relatively easy to find a home buyer. The hard part comes after the "sale" and getting it closed successfully. A sharp listing agent can anticipate problems, such as checking out the buyer to be sure they are pre-approved for a mortgage before you accept their purchase offer. If you elect to sell alone without a professional agent, be sure you have an experienced real estate attorney who can advise you on the paperwork and handle the legal details, such as the required disclosures for lead-based paint, etc.

Ashburn, Va.: We just bought a new home six months ago in Ashburn. However, my husband just got a new job in Arlington and was wondering how long should we stay in the new home before looking to relocate. Since the market keeps soaring, would we be able to make a some sort of profit on the new house. Thanks in advance.

Bob Bruss: If you sell your home after just six months of ownership, after paying the selling costs, you'll be lucky to break even (unless homes have shot up in value in your neighborhood). Your realty agent who sold you the house can prepare a CMA (comparative market analysis) to show you what sales proceeds to expect.

Germantown, Md.: My husband and I are planning to buy shortly. The whole process of "buying" is overwhelming. How will I know if I am getting the best rate base on my "FICO/beacon" score?

Bob Bruss: Before shopping for a home, get pre-approved in writing for a mortgage. Consult at least a half-dozen home loan lenders. They are NOT all the same. Ask friends and business associates who recently bought a home or refinanced their mortgages for recommendations. Be wary of lenders who promise terms that sound much better that the competitors. Often they use "bait and switch" tactics to get your loan application. The lowest interest rate isn't always the best mortgage if it's virtually impossible to quaify for that mortgage. Start your mortgage shopping now because most mortgage lenders are very busy and slow now.

E. Falls Church, Va.: What do you think about buying a home without a home inspection? We bid on a house and lost to a slightly higher bid (and we were more than $10K over the asking price!) that waived the inspection. We aren't willing to do that (yet). Is this really risky or is it a chance worth taking, in certain circumstances?

Bob Bruss: Yes, it is very risky to buy a home without a contingency for a professional home inspection. Unless you must buy now, I suggest you wait out the competitive spring market in the area you are considering. Don't get caught up in the buyer's frenzy. That's when it's easy to make a costly mistake by overpaying or buying a house with a serious costly defect which the seller "forgot" to disclose.

Reston, Va.: Mr. Bruss, do you see the Washington area heading toward the same trend as what happened in San Francisco? Will prices ever go back to an affordable level here? How are prices and availability in San Francisco? Has it gotten better?

Bob Bruss: The San Francisco home sales market has slowed down greatly and I think that will happen nationwide in the next few months. But the problem in many areas is not enough inventory of homes for sale. Many people would love to sell their homes to take advantage of today's record high prices and the $250,000/$500,000 principal residence sale tax exemption. However, they don't know where they want to move.

Northern Virginia: What is a comparative market analysis? Does the value of a home across the street, different model and builder, bring the value of one's home up if they are selling for significantly higher prices?

Bob Bruss: A CMA (comparative market analysis) includes recent sales prices of comparable nearby homes, asking prices of neighborhood homes now for sale, and asking prices of recently expired competitive listings. A realty agent who has seen those homes can then use the CMA to add or subtract value for the pros and cons of your home as compared to the sales prices of the nearby homes which recently sold. Yes, the sales prices of homes across the street can bring the value of your home up (or push it down). That's why you don't want to buy the best house in the neighborhood. It's often smart to buy the least expensive home in the best neighborhood you can afford and let the sales prices of the better homes pull the value of your home up.

Alexandria, Va.: If I only make approximately $28,000 a year, how much house can I afford? Also in what price range should I be looking if I am able to buy?

Bob Bruss: The answer depends on how much you have for a down payment. A mortgage lender will take your loan application and get you pre-approved in writing for a home loan, considering your down payment and credit situation. Only then will you know how much house you can afford.

Rockville, Md.: I recently heard of a loan called a "coffee" loan, I'm not sure if the spelling is correct, but it sounded like that. A real estate agent told me that it was 5 percent, one point, and very flexible. Have you ever heard of such an animal and if so, could you describe in more detail what it is?

Thank you very much!

Bob Bruss: I think you are referring to an adjustable rate mortgage (ARM) where the interest rate adjusts according to the COFI (cost of funds index), pronounced "coffee." To illustrate, suppose the lender's COFI index is 5% and the ARM "margin" is 1.5%. That means today's COFI ARM interest rate is 6.5%. Frankly, if you plan to stay in the home more than 5 years, I recommend a fixed rate mortgage (unless you can only qualify for an ARM tied to the COFI). A good thing about COFI is it is a very slow moving index so you probably won't get any huge interest rate swings on that ARM. I had a COFI mortgage on my house for about 10 years and liked it very much. But with today''s fixed rate mortgages so "cheap" at around 7%, try to get a fixed rate mortgage.

Largo, Md.: Bob, my husband and I have some credit blemishes. We were just approved for a loan but the stipulation was that we put 20 percent down! We are not in that position. Someone suggested we straighten out our credit and wait six months before tying again. Will six months make a difference? What are your thoughts?

Bob Bruss: That question can best be answered by a mortgage lender. Although I don't necessarily recommend them, contact Countrywide because they offer special loan programs for borrowers with credit blemishes.

Sterling, Va.: Hi Mr. Bruss, thank you for having this discussion. Our next door neighbor is selling their new house for over 30 percent what they paid for it six months ago. We have a similiar model. Does that mean we can sell our home for 30 percent more then what we paid?

Bob Bruss: If your neighbor actually gets that price and the sale closes successfully, that sales price puts a new value on your similar home. Unless the market plummets before you sell your home, you can probably get a similar price.

Washington, D.C.: Hi Bob:

I am a big fan of your excellent collumn! I have some questions on Starker exchanges regular and reverse, that I do not think you have addressed previously.

I have a townhouse being built that is "under contract" with a home builder. Because of the time that has elapsed since I signed the original contract, when the home is completed I will have a Gain of approximately $150K. I would like to sell the house rather than actually rent it. Needless to say, I want to avoid handing the gain over to the government as "short term" capital gains tax. As such I plan to do a 1031 exchange for another investment property.

Here are my questions:
1. Is there a mimimum holding period on the property being relinquished? (I will only hold title for a month or so)

2. Because of the tight housing market, I want to start my search for a replacement property early and may do a reverse 1031 exchange. Is it a must that I settle on the purchase of the property I intend to relinquish before I close on the replacement property (ie is there anyway to complete the purchase of the replacement property before I close on the property now under contract?)?

3. What if I cannot find a replacement property. Any advice on a way to park the gain, while I continue to search?

Thanks for your help.

Bob Bruss: To do a Starker tax-deferred delayed exchange under Internal Revenue Code 1031(a)(3), you must own a qualified property to exchange. Since you presumably do not yet own that townhouse, you don't have anything to exchange yet. So a "reverse exchange" where you acquire the replacement property before selling the old investment property isn't possible since you don't own the "old" property yet. No, there is no minimum holding time for business or investment property before it becomes eligible for a tax-deferred exchange. I suggest you find a replacement property, you pay the owner to buy a six-month or one-year option to buy it. That way you have it tied up until after you acquire title to that townhouse you want to sell. More details are in my special report "How Real Estate Investors Can Profit from the New IRS Starker Tax-Deferred Exchange Rules" available for $4 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or www.bobbruss.com.

Fairfax, Va.: Bob,

Do you think that it is absolutely critical to have a buyer agent? We've been looking at houses and did ask a realtor friend to help us out with finding homes, but he didn't know the area and we found more houses through homesdatabase.com than through him. Under these circumstances now we're feeling like we'd be OK just finding a house we like and then contacting the listing agent for a showing and then going through them if we like it. What are your thoughts?

Bob Bruss: The major risk of buying a home through the listing agent is that agent then is a "dual agent" with an inherent conflict of interest. The listing agent's first duty is to get the best price and terms for the seller. Of course, you want the lowest price and best terms from your viewpoint. That's why I recommend home buyers have their own "buyer's agent." No, it's not an absolute necessity. But a good buyer's agent can be a big help and it costs you no more. For example, a buyer's agent might warn you about neighborhood problems which the seller's listing agent probably won't call to your attention.

Alexandria, Va.: In a few months, I will be looking to refinance my mortgage. My current mortgage is a subprime (10 percent) loan because of a bankruptcy (will be nearly five years old by the time I refinance).

Question: any idea of how much of a reduction I'll be able to get in a new loan? Since the bankruptcy, we've re-established credit, have good income, and little debt (aside from the mortgage and one car loan). Will it be substantial, or will we still be above the market rates?

Bob Bruss: Why wait? Start shopping now for a refinanced mortgage to take advantage of today's low interest rates. Congratulations on reestablishing your credit. You are the kind of borrower lenders want. Contact at least a half-dozen different lenders to see what the best terms are for your situation.

Arlington, Va.: My husband and I are in our early 30s and looking to buy our first home by the end of the year. Many people are telling me to buy now because interest rates are good and prices are only going to continue to climb. I am concerned, however, that we haven't saved enough for a down payment. My husband qualifies for a VA loan so the required down payment may be small, but how important is that down payment? Am I putting too much stock in a 10-20 percent down payment as an investment consideration? Thank you.

Bob Bruss: As you probably know, with a VA mortgage, NO down payment is required. Your friends are giving you good advice. Get pre-approved now with a mortgage lender in writing. You don't need a big down payment. With a VA mortgage you avoid the costly PMI premiums other people with low down payments have. Save your cash. Buy with as little cash as possible so you can leverage your home purchase. If you want to later pay down your mortgage, you can always do so (although I don't recommend making large lump sum mortgage prepayments unless you have lots of cash liquidity).

Washington, D.C.: Hi Bob. I have been renting in Glover Park (NW Washington) for three years. The value of homes has gone up 46 percent during this time. I love the neighborhood and want to buy, but my feeling is that now may not be the time. How do you decide when to buy vs. rent? I'm certainly tried of writing rent checks.

Thanks, Lisa

Bob Bruss: Every home buyer, including me, feels home prices are too high and they paid too much. I felt that way when I bought my first property in 1967 for $28,500. My friends thought I was crazy to overpay. Home prices rarely come down. They usually go up steadily, with peaks, plateaus and mild valleys. If homes have almost doubled in your neighborhood in the last three years, that steady upward price climb at that rate is unlikely to continue. It sounds like a good area to consider buying.

Alexandria, Va.: I signed a contract for a condo in December, but it won't be done until September. I used the credit union at work to get approved for the loan (the builder required a loan approval).

They had very good interest rates, which is why I went to them, but if by some chance I find a lender with better rates when I'm ready to settle, is it unethical to switch? How much time does my credit union have invested in this aside from the three hours spent with me and the letters for the real estate agents and builder?

Bob Bruss: Keep shopping around for a better mortgage. No, it is not unethical to do so if your credit union won't match better loan terms you find elsewhere. It's your money that is involved. Don't let the credit union people intimidate you to stick with them if they don't offer the best loan terms for your situation.

Washington, D.C.: Is 54 years old too late to purchase a house?

I was told that because of my age, the morgage will outlive me and thus not be an investment.

Thanks.

Bob Bruss: You're never too old to buy a home or investment property. When my parents were in their late 70s, they got a 30-year mortgage to buy their condominium. Lenders don't care what your age is because they know most mortgages get paid off due to sale or refinance well before 30 years. All the lenders can about is your ability to make the mortgage payments.

NOVA: My husband and I have been separated for a year. We own a home together, but I have been renting for the past year. We are trying to get back together, but both of us have had financial problems due to the separation and maintaining two households....but if we were to get back together, we would be more than able to pay down our debts and live more comfortably. My question is: if we wanted to buy a new home (I don't want to live in the "old" one), would we have a lot of problems getting a mortgage again because of our past years credit history, or is it something that can be explained. We are in good standing with our current mortgage. Thanks for you advice.

Bob Bruss: That question can best be answered by a mortgage lender. Since you have a good payment record with your current lender, start there to see if you can get pre-approved for a mortgage to buy another home together. If not, perhaps you can find a free and clear home for sale where the seller will finance your purchase if you have at least a 10 to 20 percent down payment.

Lorton, Va.: Hi Bob! Quick question. My husband and I are looking to purchase our secound home. Prior to marriage, my husband purchased our current home. My name is not on the loan. Would I be able to benifit from being a first time home buyer even though my name is on the current title?

Bob Bruss: I don't think you can qualify as a first time home buyer. I presume you are interested in a specific first-time home buyer mortgage program. Ask the lender if you can qualify. That's the best way to find out for sure.

Washington, D.C.: Mr. Bruss:

Thanks for taking my qiuestion. Is the trend in new houses to build big house on tiny lots? So that you are VERY close to your neighbors? How are these huge houses supposed to appeal to a couple with no children who want a big yard?

Michael

Bob Bruss: If you want more space, my suggestion is to look in older neighborhoods where the lots are bigger. I agree with you. Who would want to live in a big "bulky" house on a small lot where there is hardly any privacy? But those new homes sell so somebody wants that type of housing.

Washington, D.C.: My family and I want to move into a larger home ($250,000 or less), and although my wife and I make a combined salary of over $120,000, we don't think we can come up with a 20 percent down payment without exhausting our retirement/college savings. We're both eight to 10 years from retirement age and have a teenager who is going to college in two years. What can we do to raise the down payment?

Bob Bruss: You can easily get no down payment mortgages up to $275,000 (called conforming mortgages). Many lenders offer no down payment home loans up to $500,000 too. Shop around to get pre-approved in writing. You don't need a 20% down payment to buy a home. If you sell your current home, its equity will probably provide a sufficient down payment if you insist on making one.

washingtonpost.com:

That was our last question today. Thanks to Bob Bruss, and to everyone who joined us. Feel free to submit your questions to our other columnists, and we can re-submit them as well.

Browse the transcripts from all of this week's discussions from the Online Homebuyers Conference: