Hello,

I live in MD and want to buy a duplex (currently a rental) in upstate NY. It's a very depressed area, definitely not an income generator. However, my reason for buying is not to make money, but to provide a home for my aging mother whose house is falling down around her! We would rent one side and allow my mother to live in the other half.

I own a home in MD with a mortgage. I have enough equity in this home to refinance and buy the house in NY for my mother to live in. On the other hand, I have an excellent credit rating and would qualify for a loan on the NY property, too.

However, I don't have the foggiest idea of how to proceed in this matter. Obviously, I'm looking for the least expensive financing option with the greatest tax break on the interest amounts I'd be paying on this new loan.

Grateful for any advice you can render. Thanks! ~Denise

My thoughts:

• What's going to happen to the property your mother is currently living in?
  
• Will you be expecting income from the other half of the duplex (as you mentioned now expecting to make money)?
  
• When you say you "have enough equity to refi and buy the house", do you mean have enough to purchase outright?

My feeling is to have you and mother purchase the duplex jointly in a traditional residential mortgage, with mother making it owner-occupied. You can still be the one to income qualify, and possibly the sale of the aging house would act as downpayment.

I have no idea what the tax consequences/benefits would be to doing it this way, but you'd get a good, long-term, fixed-rate loan.

Good luck!

Denise:

Fox's idea to try to keep this an owner-occupied residential loan sounds like a good one. You really want to stay with that type of financing whenever possible.