DEAR G.T.: Interesting idea but very likely not workable. Most mortgage companies will not give a mortgage on unimproved (no buildings) property, for the very obvious reason that the unimproved property would be the first thing that a borrower in trouble would allow to go unpaid. Further, even if you did what you've described and can get away with it, if you didn't pay the mortgage on the 20 acres, would not the mortgage company come after you and get a judgment against you and put a lien on your home? I suspect that they would. How would you explain to them why you wanted to borrow the money on the 20 acres to pay off your mortgage? I think they would smell a mouse. In short, it's an interesting idea but I don't believe a workable one. If there is a market, you could sell the 20 acres and use the proceeds to pay off your mortgage. That might be the best way to go if you are really concerned.
DEAR BRUCE: I am an officer in the military stationed abroad. Is it smart to buy land now so that we can build a retirement home in about 14 years? I plan on being retired from the military at that time, but I will have a post-military career. What factors should I consider before making a decision? -- C.B. via e-mail
DEAR C.B.: I would not purchase land looking that far ahead. First of all, land is an alligator: It eats. You will have to pay taxes, you must have the land insured in case someone gets injured on your property, and, furthermore, since you are not around, you have no idea in which direction the community that you purchased this land in is headed. Where they will develop the utilities and so forth. It is far better in my view to continue to invest your retirement money in the marketplace. When the time comes, then you can purchase the land. Fourteen years in advance would be a very risky endeavor.