Q: I went through a divorce a few years ago and ended up selling our house in a short sale (it was an FHA loan). I want to buy a house again and my credit score is good, around 700.
I’m told there is no way to finance the loan until at least three years after the close of the short sale. Is this accurate? I’ve asked two mortgage companies with the same response. Is there any other way to finance in this circumstance? — John, via email
A: You say your credit is good; 700 is marginal, but it certainly shouldn’t prevent you from getting a mortgage. Since you do have a bad mark on your credit, it may well be that many companies won’t finance the loan, but there are others that will. Even though you’ve been turned down by two or three companies, just continue to look for someone else.
What you are looking for is a pre-approved mortgage. Then you can go out and start looking for a house after you have the pre-approval. I am confident that if you continue to look, you will find a mortgage available.
Q: In one of your columns, this sentence caught my attention: “$250,000 at 7 percent could give you $15,000 to $18,000 a year income without attacking principal.”
Where on earth can a retiree above age 70 find 7 percent interest without taking an unbelievable risk, one from which he or she could never recover if the stock market tanked? Any thoughts would be more than welcome. — Dorothy, via email
A: I am happy that my sentence caught your attention. When I say a 7 percent return, it’s not an unreasonable number. With $250,000 or more, you will be worthy of the attention of any number of qualified brokers who will have no problem averaging 7 percent or more.
At the risk of being redundant, since this question is asked so often, invest in good, solid American companies that are paying a reasonable dividend around 2 percent to 4 percent, plus their appreciation overall. In the marketplace, 7 percent is entirely possible.
I can tell you that I am not risk-averse. On the other hand, I am not highly speculative in my investments, but mine have been consistently earning over 7 percent for a good many years. There have been some bad years, but overall, it works well.
