NEW YORK (CNN/Money) -
Over the past couple of weeks we've bombarded you with advice on real estate. As a result, we've received some great comments and questions from you.
In today's special five tips segment, we're answering your real estate questions.
1. In spite of refinancing a home mortgage, we were taken for a ride. The loan agent promised no closing costs. Just as we were about to write the check, the title company said it forgot to add one closing cost and tacked on fees. Is this the usual way these companies operate? -- Sujata
Yes. This is a common problem, but HUD (U.S. Department of Housing & Urban Development) is trying to curtail it by proposing new legislation.
In the meantime, here's one way to help the problem. Make sure to hold onto your Good Faith Estimate. Shortly after a person applies for a home loan they will receive this document. This details the total estimated costs they are likely to see at the closing. You want to make sure you are dealing with someone who is reputable and won't tack on additional charges and fees at the closing.
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 CNNfn's Gerri Willis answers real estate questions.
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Shop around early for as many Good Faith Estimates as you can. Later in the process, check out the HUD-1 settlement statement. The HUD-1 is the final statement that outlines the ACTUAL costs you owe. This usually isn't prepared until shortly before closing. 24 hours before closing demand to see your HUD-1 and compare it to the original Good Faith Estimate. You have a right to see it and a right to protest if you see a big difference between the estimated and actual costs.
If you're a homebuyer who prefers simplicity, guaranteed mortgage packages might be the way to go. These provide a single price up front that will include the mortgage interest rate and the total settlement charges. But, keep in mind these guaranteed packages will not give you a cost breakdown. For more information, visit www.hud.gov.
2. Recently I sent for my three different credit scores. And the Experian score was almost 100 points lower than the two others. Why would there be that much of a difference, and which one is correct? -- Dave
It makes good sense to track down your credit reports before you even go to a bank or mortgage broker. This way, you'll have the knowledge and the confidence to apply for a loan without being in the dark.
The three major credit bureaus are Experian, Equifax and TransUnion. Your credit scores can vary based on the information that these companies collect. These companies work independently of each other. In fact, TransUnion says the average person's credit score varies as much as 40 points between the three agencies.
Unfortunately, you can't force bankers to look at only one credit report. Chances are, they will see all three. So, if there is a noticeable difference or you spot some discrepancies you'll want to investigate. When you find inaccurate information on one of the reports, try to work with the credit agency to clear up the problem.
Start by writing letter to the agency detailing how the report is wrong and providing information, receipts and cancelled checks to back up your claims.
3. I recently sold an investment property through a realtor. Is any of the real estate commission tax deductible? -- Jim
The commission isn't directly deductible but it can reduce your taxes. Consider this: You can subtract the commission from your sale price to cut your taxable profit.
For example, lets say you bought the original property for $200,000 and are now selling it for $320,000. And lets say the selling expenses including real estate commissions are $20,000. Other selling expenses may include the cost to do certain repairs in order to prepare the property for sale. You can subtract the $20,000 from the $320,000. Therefore the adjusted sale price is reduced to $300,000.
And here's another interesting point if you've recently refinanced: Usually when you take out a mortgage, you take the entire point expense upfront as a tax deduction. This is the upfront interest quoted as a percent of the loan amount. If you refinance, you will have to spread the deduction points out over the life of the loan.
4. What are the dangers of an interest-only mortgage? -- Brian
Interest-only mortgages have been a hot product for homebuyers in markets where prices have skyrocketed because they allow you to pay less each month in mortgage costs at least at the beginning of the loan.
The way they work is that for a set period of time you pay only the interest portion of your monthly payment. At the end of that period, however, your monthly mortgage payments are adjusted higher to reflect the entire amount of your loan that is due.
In other words, if you were paying interest only on your $250,000 mortgage for the first five years of your 30-year loan, then at the end of that period your mortgage payment would reset to reflect the costs of a $250,000 mortgage paid over 25 years.
That bump in costs is one of the downsides of an interest-only mortgage, but probably more important is the fact that the interest-only mortgage delays your buildup of equity in your home. This could become a problem if you were forced to sell your home in a declining market and found that you actually owed more on your home than it was worth.
5. Is home equity loan interest deductible? -- Douglas
Yes, but only up to a point. Interest payments on a home equity loan of up to $100,000 are deductible even if those loans are secured by two different pieces of property.
The rules get more complicated, however, if your debt (that is the principal on your home equity loan and your first mortgage) is more than the value of the property. In that case, you'll be able to deduct only a portion of your interest costs.
However, if the money is used for home improvement, you'll have greater leeway deducting your interest. Check out the high income phaseouts at www.irs.gov. And always consider consulting a professional on complicated tax questions.
Gerri Willis is the personal finance editor for CNN Business News. Willis also is co-host of CNNfn's The FlipSide, weekdays from 11 a.m. to 12:30 p.m. (ET). E-mail comments to 5tips@cnnfn.com.
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