DEAR BOB: We are considering buying a home on which the seller insists on carrying the mortgage. Is this bad for us? Jerry G., Greenbelt.
DEAR JERRY: No, it's wonderful for you. The property seller is usually the best and cheapest source of mortgage financing. Consider yourself very lucky to have found a seller who will finance your purchase.
DEAR BOB: I plan to sell my home now that my children are grown. It will be in excellent condition at selling time. I plan on selling the home myself. Do you have any information that might help me do a smooth, first-rate job for both sides? Una C., Germantown.
DEAR UNA: You're smart to get your home into top shape before putting it on the market. A few hundred dollars spent sprucing up a home for sale can often return thousands of dollars due to added buyer appeal.
The first step to a smooth sale is pricing your home right. Don't price it too high because it won't sell and you'll have extra months of carrying costs. Price it too low and you lose thousands of profit dollars.
The market value of your home is derived from recent sales prices of similar nearby homes. There are two primary ways to find you home's value.
Invite at least three active local real estate agents to give you a "competitive market analysis" of your home's value. They will do so free of charge in hopes of getting your listing. Ask lots of questions, such as their commission, services, success record and client references. Then decide if you really want to sell your home without professional help.
A professional appraisal will cost from $50 to $200, depending on your home's size. Such an appraisal can be very impressive to buyers if you decide to sell your home alone.
DEAR BOB: We have "pre-qualified" for either a VA or FHA home loan with a local bank. Our problem is getting a seller to sell us a home we like. It seems all the sellers here refuse to pay the "loan fee" demanded by the lender. Isn't there some law prohibiting discrimination against buyers? Yasko M., Washington.
DEAR YASKO: While there are laws prohibiting mortgage loan discrimination on the basis of race, creed, national origin and age, there is no law which can force a home seller to pay the loan fee for your FHA or VA mortgage.
FHA and VA mortgage lenders charge loan fees to raise the government-set interest rate (now 10 percent) up to market levels obtainable on conventional mortgages. By law, the FHA or VA buyer cannot pay more than a one-point "loan processing fee."
For each one-point loan fee (one point equals one percent of the amount borrowed), the lender's true yield is raised one-eighth percent. Keep shopping until you find a home seller who will pay your FHA or VA loan fee.