Expert: Dick Dennis - 12/16/2009

Question
My mother and i agreed to 40,000. She said a check for 15,000 would pay off the mortgage. Then she asked if i could pay her 500.00 monthly until the balance of 25,000 was paid. I said i could do it but that ties up my money to replace the garage that is falling apart and if any thing come up I'll be strapped for the cash. Should i just get a loan for 60,000 and build my garage and pay her off. I'm looking to save money in closing costs and mortgage interest by just giving her the 40,000. If work is good i should be able to right her a check for 40,000 by this summer 2010.

Answer
Well, if you don't want to wait, Jason, I would suggest you use your favorite lender to make your loan. However, be aware that the purchase price you paid for the house will be a heavy impression on the bank. Hopefully, you have a house that would appraise for at least $75,000 because the lander is going to require you to have a 20% equity in the property if you are looking for a $60,000 loan, and your credit has to be good and you have a good job. Be aware also that you will be paying borrowing and closing costs. I do wish you well.

Dick Dennis
dixiedee13@aol.com