Expert: Dick Dennis - 7/25/2007

Question
My mom's health is poor and my husband and I want to buy her home, build an addition for her to live in, and remodel the existing home. She owes $55,000 on her mortgage, the tax value (as of April 2007) is $148,000. What is the best way to borrow  money to do these things? Our #1 priority is building a separate apartment for her. We've contacted local officials about permits, etc and all is a go. We just need to borrow the money. Also, this will be our first home purchase.
Thank you!

Answer
What you need to do, Darla, is to contact three lenders or banks and choose the one that will give you what you want for the best price . . . just like you stepped into a market or any other store. In talking with the lender, be sure you advise them what you want to do. They will no doubt tell you that you need to GET ON TITLE WITH YOUR MOTHER before they can make the loan for you. Or, your mother can assign you the complete title to the property, but if you do it that way, your mother should retain a "Life Estate." That gives her the right to continue to live in that property for the rest of her life or until she moves out into a special home even though the title to the property is in your name. To make sure, Darla, you are not skipping any bases, I suggest you consult with a REAL ESTATE attorney in your state to make sure you are following the correct roads in this plan. I do wish you well.

Dick Dennis