DEAR BOB: I would like to buy a condominium or small house soon. I am a 55-year-old single mother with two sons, ages 21 and 19. I'm also a career woman with a decent income. Because of a divorce in 1992, I suffered financially and then had to file bankruptcy, which has been discharged. My son goes to UCLA and has a year left to graduate.

Recently, I inherited some money for a modest down payment on a home. Credit reporting agencies, however, have my bankruptcy record in my file. After my bankruptcy is deleted in 2000, when I apply for a mortgage, is it true I will be turned down because of my age? I was told the only way I can get approved for a mortgage is if my son cosigns. Is that true?--Sunshine D.

DEAR SUNSHINE: No. A bankruptcy discharged more than two years ago should not stop you from getting mortgage approval, presuming you have not had any recent, adverse credit problems. But you might have to pay a slightly higher interest rate.

You are now an excellent candidate for a home loan. Your age is irrelevant to obtaining the loan. My parents, then in their seventies, had no trouble getting a 30-year mortgage. Lenders don't care about age, just about your ability to make the payments. And forget about getting your son to cosign. You don't need it because you now have good income.

Today is an excellent time for you to buy a home. Because mortgage lending volume is down, lenders are eager and have time to work with you to get you pre-approved, not just pre-qualified, for a home loan.

Fannie Mae and Freddie Mac are raising their home loan maximum to $252,700, from $240,000, effective Jan. 1. Depending on your credit score, you might qualify for one of their loans. If not, many other lenders want your loan business.

If you're into the Internet, visit mortgage Web sites to compare terms, or consult a local bank, S&L, mortgage broker or mortgage banker. After you get pre-approved for a loan, you will know the maximum amount available and can then go home-shopping with confidence.

DEAR BOB: My two partners and I have a buyer for a six-unit apartment building that we bought a few years ago. We were supposed to close on Dec. 30, but when I learned I would owe capital gains tax on my profit, I talked the buyer into delaying the close until Jan. 10.

My lawyer and real estate broker kept mentioning "Starker exchanges" to avoid the tax, but my accountant doesn't have a clue what that is. My real estate broker, however, found a rental house I can acquire with my profit share from the apartments. How long does it have to be rented before we can move in?--Soledad D.

DEAR SOLEDAD: To defer the capital gains tax on your share of the apartment building profits, you can make an Internal Revenue Code 1031(a)(3) Starker delayed exchange for another rental property. That means you sell the apartment building and have your sales proceeds held beyond your constructive receipt by a third-party intermediary. Many bank trust departments and title insurance firms love to be intermediaries for Starker exchanges.

You then have 45 days after the sale closes to designate the "like kind" rental or business property you want to acquire. Up to 180 days after the sale are allowed to complete the acquisition with the sales proceeds held by the intermediary. The IRS won't say how long the acquired property must be rented before you can convert it to your personal residence, but 12 months should be sufficient.

DEAR BOB: Each month, my wife and I waste $73 for private mortgage insurance premiums. Can we deduct this amount on our income tax returns? Also, what do we have to do to stop paying PMI since our home has gone up at least 15 percent in market value since we bought it and since we've also added improvements, such as new landscaping, a new roof and a swimming pool?--Rick R.

DEAR RICK: PMI premiums are not tax-deductible. However, PMI is not a total waste of money because without PMI you probably couldn't have bought your home with a low down payment of 10 percent or less.

Most mortgage lenders, such as Fannie Mae and Freddie Mac, allow homeowners to drop their PMI premiums after their home equity increases to at least 20 percent. In other words, the loan-to-value ratio must be below 80 percent.

Contact your mortgage loan servicer to learn their exact procedure for PMI cancellation. Most will require you to pay for a new appraisal, a cost of about $300, by an appraiser on the lender's approved list. Be sure to point out to the appraiser all of the home's features and the improvements you made, as well as recent sales prices of comparable, nearby homes.

You can be certain the lender will instruct the appraiser to evaluate conservatively, so be sure to emphasize to the appraiser what you think your home is worth. If the appraisal comes in unreasonably low, be sure to protest and insist on a review appraisal.

DEAR BOB: In February I will be taking a new job at a significant pay increase. The problem is I own and live in a one-bedroom condominium, which is barely worth the mortgage balance. If I sell the condo, after I pay a real estate commission, I will have about a $7,000 loss.

Even though I will be living about 850 miles away, my friends tell me I should rent the condo, in hopes it will increase in value during the next few years. I would have about a $150 rental loss each month after paying the mortgage, property taxes and condo assessment fee. What would you do?--Kent N.

DEAR KENT: Sell. Managing a condo rental from 850 miles away is no fun if you have a vacancy, if the rent isn't paid on time or if other problems arise. Although a loss on the sale of a personal residence is not tax deductible, since condos are not known for great market value appreciation, it's best to sell now and cut your losses.

DEAR BOB: We plan to put our house up for sale in January and have been interviewing real estate agents about listing it. One gave us the seller disclosure form we will be expected to fill out. It asks relatively easy questions about our knowledge of the need for repairs. Our house is in excellent condition now, but about three years ago part of the foundation had to be rebuilt because it was sinking. We spent about $20,000 fixing it. Do you think we need to disclose this major repair?--Ken W.

DEAR KEN: If the wording of the disclosure form asks about what is wrong with the house today, then you are not required to disclose major repairs made three years ago that corrected a problem. Many home buyers and their agents will check for building permits. If your buyer checks, the building permit for the foundation repairs will be on file.

Since your home's previous condition does not have a material effect on its current desirability or market value, there isn't any need to disclose past repairs, unless you didn't get a building permit, of course. Only if the repairs were ineffective or done without a building permit and a final inspection, or if the problem still exists, would you need to disclose past repairs. For details, consult a local real estate lawyer.

DEAR BOB: We have a home under purchase contract. During our professional inspection, the inspector discovered that the roof flashing around the chimney leaks and must be replaced. A roofer estimates the maximum cost will be $1,500 "depending on what is underneath that needs replacement." The sellers refuse to pay since this is an "as is" sale. What should we do, as we really want to buy this house?--Sharon L.

DEAR SHARON: Ask yourselves whether you are willing to lose this opportunity over just $1,500. That seems like a lot of money. However, in relation to the home's purchase price, it is probably less than 1 percent.

Since the seller won't pay for repairs or lower the purchase price and you really want the house, I suggest you bite the bullet and go ahead with the purchase.

DEAR BOB: As you often suggest, we applied to get pre-approved for a loan before shopping for a home. Since our income is not the greatest and we have a few "dings" on our credit report, the lender offered us an adjustable-rate mortgage instead of a fixed-rate mortgage, which we preferred. The ARM's interest rate will be "locked in" for three years. Is this a good or bad deal?--Janice L.

DEAR JANICE: The important thing is to get the mortgage financing you need to buy a home. In today's relatively stable interest rate environment, nothing's seriously wrong with ARM loans. If you make your payments on time for three years during the lock-in period but don't like the ARM, when your interest rate becomes adjustable in three years, you can then probably refinance with a fixed-rate mortgage based on your improved credit rating.

Readers with questions should write Robert J. Bruss at P.O. Box 280038, San Francisco, Calif. 94128.{copy} 1999, Tribune Media Services Inc.