Money Management Q&As

March 17, 2006



An easy way to transfer title

Q. I want to buy my first home, but since it's a bit out of my price range, my father and I are going to buy it together. The title will list both of our names. Will it be easy to remove Dad's name once the loan's paid off?

A. Yes. Your father can simply sign a "quitclaim deed" transferring his interest in the property to you. He doesn't need an attorney's help; he can buy a standard form from an office supply store or bookstore that sells preprinted legal documents, or download one from the Internet at a site such as http://www.findlegalforms.com. After completing the form, he should get it notarized and have it filed with the appropriate land records office in your county.

Q. Since my parents didn't believe in borrowing money, my recently widowed mother has no credit record. But I've read that some credit bureaus are creating alternative credit scores that factor in household bill payments, to include people like her. What are the details?

A. Fair Isaac, which originated the traditional FICO score, is the most prominent company doing this. Its three-digit FICO Expansion score factors in such things as deposit records and payment plans for purchases. First American CREDCO's Anthem Score is a similar measure but reflects payments for rent, utilities, insurance, and child care costs. Maryland-based PRBC (Payment Reporting Builds Credit) lets consumers help build their own credit profile by providing proof of historical payments and having utilities and other billers report future payments to PRBC.

But whether any of these alternate scores would help your mother build a credit record remains to be seen; it will depend on how widely they're adopted by lenders. A more certain approach would be for your mother to apply for gasoline and department store cards, which are relatively easy to get since their limits are low.

Direct registry vs street name

Q.To cut down on investment-related paperwork, I may turn in some stock certificates and have the issuer add me to its Direct Registration System. Are there any disadvantages?

A. The main one is that you probably won't be able to buy or sell shares right when you want to. The company will likely conduct transactions according to its own timetable and at an average market price for all shares sold during a set period, not the current price when you request the sale.

If reducing paperwork is your main goal, another option is to list the securities in "street name," meaning your brokerage's name. That puts the stock certificates on the firm's books, so that you won't have to store them or bring them in when you decide to sell shares. The main disadvantage of this is that dividends and communications from the company may not reach you as quickly, since they'll pass through the broker's hands first.

Bars on student loan interest deductions

Q. Your informative article, "Smart ways to tackle med school debt" (available at http://www.memag.com), states that student loan interest isn't deductible if you're married filing jointly and have adjusted gross income of more than $135,000 for 2005. Does that limit apply if both husband and wife have loans they're paying off?

A. Yes. What's more, neither spouse can deduct his or her student loan interest by filing separately, even with an AGI that's below the $65,000 limit for single filers.

Do you have a money management question that may be stumping other doctors, too? Write: MMQA Editor, Medical Economics, 5 Paragon Drive, Montvale, NJ 07645-1742, or send an e-mail to memoney@advanstar.com (please include your regular postal address). Sorry, but we're not able to answer readers individually.