DEAR BOB: We found a house we want to buy for future occupancy in a year when our apartment lease expires. When we applied for a GI mortgage, we were rejected because we weren't going to occupy the house right away. Is this legal? The loan officer didn't seem too sure of himself. Hudson M., Fairfax.
DEAR HUDSON: Your loan officer is correct. Both GI and FHA home loans require owner occupancy.
DEAR BOB: We recently bought a house with the help of a $92,000 GI mortgage. At the closing, the bank charged us a $920 "loan processing fee." Is this tax deductible as interest? Loren B., Springfield.
DEAR LOREN: no. The IRS has ruled that GI and FHA mortgage loan processing fees are not tax deductible as interest. It's an unfair ruling, but who said tax law is fair? See your tax advisor for further information.
DEAR BOB: Do you advise apartment tenants to buy tenants' insurance policies? We have lots of stereo equipment in our apartment that could be costly to replace in the event of a fire or theft. Don N., Washington.
DEAR DON: Yes. Buying a tenant's insurance policy is smart. It pays for loss to your possessions by fire, theft and other causes.
But stop around for such insurance. I was surprised to learn that the company that is cheapest for homeowners and apartment "package" insurance policies is one of the most expensive in my area for tenant's insurance.
By the way, one major insurer gives big discounts if you are a non-smoker. So shop for the best tenant's insurance policy - just as you should stop around for the best auto and property insurance policies.
DEAR BOB: I just passed my real estate license exam and am anxious to get started in real estate sales. But I hate to quit my job, because I don't have much savings to live on while I get started selling homes. What is the best way to start in real estate sales to get income fast? Bettina E., Silver Spring.
DEAR BETTINA: A good way to earn almost instant real estate commissions is to become what I call a "rental lady." That means working in the rental department of an active real estate firm that has lots of listings of homes and apartments for rent.
It's hard work, often involving weekends and evenings, but good "rental ladies" often earn monthly incomes of $2,000 or more. Later on, the people you rent to will become your buyers when you switch over to full-time real estate sales.
DEAR BOB: One letter to you recently in The Washington Post grabbed my attention. It was the one asking when interest rates and home prices would come down. You gave a good answer, that today's relatively high prices and interest rates are still bargains, after considering inflation and income tax savings. But compared with the rest of the world, U.S. real estate is a steal. Even though I am not a U.S. citizen, I invest in U.S. property, as do many of my friends.We know you have the best politically-stable government in the world and that our invested money is safe in the U.S. Gunther H., Germany.
DEAR GUNTHER: Your letter was a pleasant change of pace from all those complaining about rates, the difficulty of finding a reasonably priced home, and problems with imperfect property. Although I haven't been to Europe for some time to check on realty developments there, I just came back from the Far East, where people told me the same things you said.
U.S. real estate may not be perfect, but it is still cheap compared with prices in the rest of the world. It's far better than any alternative investment I know of.
DEAR BOB: My son is a young minister who is being given the option of a church-owned home or a housing allowance so he can buy his own home. Which is best, considering high interest rates and home prices? Mrs. C.S., Rockville.
DEAR MRS. C.S.: Most ministers now want to own their own homes rather than having to live in a church-owned parsonage. The reason is that by building equity in their own houses they are providing for their future retirement security. Even though interest rates and home prices may seem high, home ownership is the bst inflation hedge there is.