Owner may lose relationship with cousins, but credit not likely to suffer

Q: I own some land with four cousins. They camp there, but I live thousands of miles away. If I stop paying my share of the taxes, will it hurt my credit record? -- M.V.

A: The bad news is that each owner is legally responsible for the entire tax bill. The good news is that in a tax foreclosure, action is usually taken against the property, and not personally against the landowner(s). If you don't pay, your relationship with your cousins might take a hit, but I don't think your credit record would. I'm not a lawyer, though, and you'd better double-check with an attorney in that state.

Where Is Help?

Q: My son recently got divorced, so his income was cut in half. He is now very house poor. I have read about a program that helps people in his situation. He is not behind in his payments, so there is no foreclosure looming. Do you know anything about this program? How you can qualify for it? Or is there another way to possibly get his home loan reduced? -- email

A: Consult with his lender. He may also want to talk to a nonprofit Department of Housing and Urban Development housing counselor. The names of local agencies are available at HUD.gov.

Good Credit, No Cash

Q: I have really good credit, but no equity. I have a good and secure job as a teacher -- with seven more years of salary increase, ending around $80,000. I am considering buying a home at a cheap price as an investment to sell in two to four years. Is it possible to get a mortgage that includes enough to pay off existing debt and home improvement costs? -- email

A: The whole point of a mortgage is that the real estate is pledged as security for the loan. If the debt isn't repaid, the property can be sold at auction to recover the money. It would make no sense for a lender to give you more than the place is worth. Quite the opposite, they lend less than that, in case the place couldn't be resold for enough to cover the debt.

There is, however, one exception. An Federal Housing Administration mortgage plan known as No. 203k allows you to borrow enough to buy a place that needs substantial rehabilitation and also the money to fix it up.

Find a lender who handles that program, which is, by the way, intended for an owner who is going to live in the house. A mortgage broker would know if that loan is locally available. Your excellent credit record will help, but you'll need some cash for even a minimal FHA down payment and other closing costs.

There's no guarantee you'd make any money selling after just a few years -- given the costs of buying and selling and the current uncertainty of the market.

Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope). Or readers may contact her at askedith.com or edithlank@aol.com.