Dear Edith: During the current mortgage crisis, I see many credit score numbers bounced around between say 550 and 650. That's doesn't mean a thing to me. I wonder if you could provide a few numbers and tell me what they mean. — P.B.

Answer: To help analyze your financial situation, mortgage lenders these days rely on a score that's based on your credit record.

A score of 800 is considered just about perfect. More than half of us score 700 or better. The 600s are considered "fair." The bottom 15 percent of the population scores less than 500.

These days, most mortgage lenders believe at least 680 means the borrower is likely to repay a loan. Insurance companies have found that a credit score is a good predictor of how many claims might be placed, and they may give high scorers a break on premiums. Employers sometimes use credit scores to judge a candidate's reliability.

More than one-third of your score is based on the payment record in your credit history. Late payments count against you; judgments and collection accounts hurt more, of course.

Next, most important is the amount of debt you presently carry, and how much you have already borrowed compared to your credit limits (less is better). Your score also reflects the length of time you've been managing credit, and the types of credit you've been using (some are considered more prudent than others).

You can receive a free credit report every year from each of the three major companies. The website to use is www.annualcreditreport.com. Watch out for similar web addresses, set up by enterprising folks who hope to charge for other services, or catch your personal information.

While you can pull your records for free, you won't get the actual score. For that, be prepared to pay somewhere under ten dollars.

Tax on Depreciation

Dear Edith: In 2007, I sold my rental property that was completely depreciated. I'm told by my accountant I must now pay ordinary income tax on the depreciation recapture. I was hoping to pay only lower capital gains tax on the entire net profit. This seems unfair to long-term investors of real estate. What are your thoughts? — J.

Answer: You've been able to deduct the cost of the property from your taxable income over the years. Some people would say that was unfair to the rest of the taxpayers.

At any rate, it's my understanding that recaptured depreciation is taxed at no more than 25 percent. Do check with your accountant again.

Net, Net-Net, Triple Net

Ms. Lank: What is the difference between net, net-net and triple net when talking about commercial leases? — B.

Answer: Most often, a net lease is simply one in which the tenant pays some of the landlord's costs. With a net-net lease, the tenant usually pays property taxes and insurance. With a triple net, the tenant pays property taxes, insurance, and also maintenance — just about everything except the landlord's mortgage.

Selling With Lien

Dear Edith: Can I sell my house if it has a lien against the property? — Via e-mail

Answer: You could if someone agreed to take it with that financial claim against it. The buyer wouldn't be able to get a new mortgage loan, though, if the lien remained.

Usually a lien is paid off at the closing. An existing mortgage, for example, is cleared at the last minute, with some of the buyer's purchase money. It's the same thing with judgments.

Can Widow Assume Mortgage?

Dear Edith: If a married couple has a home loan, but only the husband's name is on the deed and he passes away, can the wife assume the loan? Or, would she have to get a new loan? — Via e-mail

Answer: Lenders do not call in a mortgage loan when property is inherited by a surviving spouse.

Transferring Property

Dear Edith: I have a home that has been handed down to me, free and clear. I would like to transfer the property out of my name to an entity. Could you explain the procedure? — R.

Answer: You give your ownership away by signing a deed that says, "I hereby transfer my rights in this property to. …" Your signature is notarized, you give the deed to that "entity" and it is entered in the county's public records. Unless some unexpected complication arises, the process can be relatively simple. A lawyer should help with the paperwork so that it's in the right form and will be accepted for recording.

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 e-mail her at ehlank@aol.com.

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