Jewish World Review Feb. 28, 2000 / 28 Adar I, 5760
Rely on a real-estate lawyer
DEAR BRUCE: Three years ago my husband and I purchased a home. I went alone to the loan application because my husband had a prior appointment.
Upon reviewing the loan documents the day of the closing, I questioned the note. The trust deed showed our names, but the note made a specific notation of my husband's name, saying he was in no way responsible for paying for the loan.
I protested this notation, and the lender acknowledged the error and allowed us to refinance at no cost to correct the note properly. There were other paperwork problems, but I am now told that everything is under control. I trust my husband completely but no one knows what the future holds. -- L. (e-mail)
DEAR L: Nowhere did you indicate that you had an attorney representing you in this matter. Yours is a classic case of technical difficulties arising with no one at the closing truly understanding them. This is why I would never, ever consider buying a piece of real estate without being represented.
If it were me, I would take the documents that you currently have and let an attorney look them over.
DEAR BRUCE: I am currently renting a townhouse for $1,250 a month. I can buy a new one for $260,000 with about the same monthly expense after paying $105,000 down. I will probably be leaving this area in the next five years, and I am concerned about having to sell a townhouse if I buy. Who knows if the market will exist?
Should I continue to rent and remain flexible, or should I buy a townhouse, build equity and get the tax advantage? -- J.H., Los Alamos, Calif.
DEAR J.H.: You have painted a bright picture of the financial advantages of owning a home, but you've overlooked the fact that you've given up $105,000 invested.
In today's marketplace, aggressively investing that $105,000 could easily generate $15,000 to $20,000 a year. Put another way, how much equity will you have developed in a house over your down payment in the first year?
In this circumstance, even if you weren't thinking about moving, assuming you can rent a unit about the same size and quality for $1,250 a month, it's a no-brainer.
DEAR BRUCE: Several years ago I got deep into credit-card debt -- I owed about $25,000. At that time I was in this country on a worker's visa that had expired, and I was in an expensive legal battle to remain in this country. I voluntarily left when my options ran out.
The debt, which was incurred in 1993, still remains unpaid. Now I am back in the United States, but it will take me years to pay this off. I know you don't recommend bankruptcy lightly, but is there any other option for me? -- M.B. (e-mail)
DEAR M.B.: There are always options. Whether they are viable is another matter.
You failed to indicate what your income is now, and that is a significant piece of information. In the event that your income is sufficient to pay this off in a few years, I would urge you to go to one of the non-profit debt counselors scattered across the country. They may very well be able to negotiate a better deal than you would be able to, and you can conclude this debt
Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).
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