Dear Mary: We have been paying on a beautiful piece of property that has a creek running through it. We hope it will be the site of our future retirement home. We got a five-year loan on it, and a balloon payment is due soon. We don't know what to do. We can't get a fixed-rate mortgage on it because it is vacant. Is this just our bank's policy, or is this typical? The bank has explained that our options are: 1. Put a house on the property, and then rent it. 2. Refinance the house that we live in to include enough to pay off the vacant property, which would be $31,000. 3. Take out another five-year loan with a balloon payment, at a higher rate than our current loan. 4. Open a home equity credit line against our primary residence to pay the balloon payment. If we do this, the new payment on our home would be equal to the two payments we are making now. 5. Sell the property. Will you please advise us? -- Chris A., e-mail

Dear Chris: With the limited information I have, my advice is for you to exercise option No. 4: Use equity in your home to pay off the land. Here's my reasoning: Your total debt would remain secured (as opposed to unsecured debt, which is very dangerous for your wealth). You simply would transfer the portion secured by the land to your home. Using figures you included with your letter (which I chose not to include herein), your total new payment on the house ($1,005) would be just about the same as what you are paying now on your home mortgage and the land payment combined, or 25 percent of your net income. I think this is a great plan for you and one that would let you keep your dream. If you really buckle down, I know you will find ways to pay off that home equity loan way ahead of schedule. Good luck, and I wish you many years of happy retirement on the banks of that beautiful creek!

Dear Mary: I was so proud of myself; I made your biscuits today! As I cut out the last one and laid it on the baking sheet, I realized I had forgotten to add the baking powder and salt to my all-purpose flour. I feel sick over the time and ingredients I have wasted. My biscuits are in the freezer. Is there any hope for them? -- Sarah G., e-mail

Dear Sarah: Without leavening (something to make them rise), your biscuits will come out of the oven exactly the same height they are at this moment. They will be dense and hard as rocks. Do your kids play hockey? They will make dandy pucks. If not, I'd toss them now and consider that a small price for an important lesson learned.

Do you have a question for Mary? E-mail her at mary@everydaycheapskate.com, or write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723. Mary Hunt is the founder of DebtProofLiving.com and author of 17 books, including "Debt-Proof Living." To find out more about Mary and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.
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