Monday, September 21, 2009
I just stumbled across this story in the current print issue of Money Magazine and was kind of struck by the casual nature of the $100,000 home equity debt problem and solution within the Hetherington family.
Lend to family the right wayIt seems as though the senior Hetherington was more concerned with quadrupling the current rate of return on his bank CD than, perhaps, details surrounding the fact that his son pulled a cool hundred grand out of his house.
A loan to a relative can be a sweet deal for both sides, if it's served up correctly.
By Linda Stern, Money Magazine
(Money Magazine) -- When Brian Hetherington complained to his father two years ago about the weighty 9% rate he and his wife were paying on their home-equity line of credit, Jim, the senior Hetherington, had an idea. He could lend the couple the $100,000 to pay off the loan and charge them only 6%. It's been win-win ever since. "We haven't missed a payment," says Brian, 43. And his folks are still earning a return on their money.