Q: I bought a house about 4 years ago. We did not hire a professional home inspector, but instead used a contractor we trust to look over the home.

Recently, we noticed the corner of the garage was starting to sag. We called the insurance company, thinking it was due to a snow and ice problem, but the engineer they sent out said the problem had been there for a long time. He said the prior owners had known about it because they did a scab job in order to hide the problem that would come out later.

Our insurance company said they would not cover it because it was structural problem, not caused by a catastrophic event, like a huge snowstorm. The damage was caused over time.

He specifically wrote in his report that someone did a scab job to cover up a big problem. So, we spent over 7000 dollars fixing a problem that the sellers knew about, and did not disclose in their seller disclosure form.

Is there anything we can do about this now?

A: Unfortunately, the time to catch this problem would have been four years ago, when a professional home inspector might have found it.

Unless you can prove the sellers fraudulently deceived you, I think you just have to accept the fact that some people will do almost anything to get out of paying $7,000 to fix their roof.

Consult with a real estate attorney about any legal options you may have at this point.

Q: I want to invest in a Roth IRA, but I don’t know how it works. Is it better than a regular IRA? I have a 401(k) plan at work, and am not sure what the difference is between them.

A: Other than the fact that a Roth IRA is also a retirement account, it’s very different from a 401(k).

Retirement accounts like a 401(k), 457(b), Keogh, SIMPLE, and conventional IRA are all accounts that you fund with pre-tax dollars. In other words, the way you contribute to these accounts is the cash is automatically deducted from your paycheck. So, they’re tax deductible, meaning that you pay less tax now because they lower your “taxable” income, and then they grow tax deferred. That means you don’t pay any tax until you withdraw the money years from now.

With a Roth IRA, you’re dealing with after-tax cash. You can put in up to $3,000 per year (or up to $3500 per year if you’re over the age of 50). This cash comes out of your savings, or your take-home pay. The nice thing about the Roth IRA is that the cash grows tax-free forever, there are some estate-planning benefits, and you can use the cash to pay for medical bills and tuition before you turn 59 ½, which is the age at which you’re allowed to start making withdrawals without penalty. (You can also use cash from a Roth IRA or conventional IRA to purchase a first home.)

Just remember, that the Roth IRA is an account. Once you fund the account, you still have to choose an investment, whether you buy individual stocks, an index fund, bonds, shares in a real estate investment trust, or just leave it in cash.

Q: I’m starting a Roth IRA for my 15 year old son. Do you recommend an index fund?

A: I do believe in index funds, because they are cheap to own and easy to maintain. You really don’t have to think too much about them. So, yes, they’re a good investment. You might want to open your son’s account at Vanguard, which offers some of the least expensive index funds in the industry.

Remember that to open a Roth IRA, you actually have to earn money. So, as long as your son has some kind of job, whether it’s bagging groceries at the local store, working in your company or delivery newspapers, and is actually filing a tax return showing income, then he is eligible to open up a Roth IRA, up to the amount of his earnings (you can make the contribution for him, if you like).

Jan. 19, 2009.