Loaning Money to relative
We have more money in a money market than we like, and it is earning almost no interest.
We are interested in loaning this money to our adult (unmarried) daughter to pay off her mortgage instead of her refinancing. The amount would be about $140,000. How should this be done?
Terry Says
Unless you are going to consider this money a GIFT to your daughter, never to be repaid, she should go ahead and refinance. That will let her get a 30-year fixed rate loan at less than 3% — likely the best deal in modern history, and not likely to last long!
If you want to make it a gift — just give the money TO THE BANK — to ensure she does use it to pay off your mortgage. Unless you die with over $11 million in assets, this gift has no impact on estate and gift taxes.
