I Borrowed Money from My Mother

I wrote my mom a whopper of a check today, as I do on the first day of every month.

The check is for $1,231—almost as much as my mortgage. Ouch. Every month she acts surprised. She holds up the check with both hands and says, “Oh, thank you!”

“Mom,” I say, “it’s YOUR money.”

Until last year, I hadn’t borrowed money from my mother since a couple of years after college when I found myself unable to pay my rent. She loaned me a couple hundred dollars, though it really wasn’t a loan. I never paid her back, and she didn’t ask. It was one of those help-your-kid-god-when-will-she-get-a-decent-paying-job, quote-unquote loans.

This was different. Last fall, my husband, Jason, and I asked my mother for $28,500.

“Of course,” she said without hesitation.

We had been going through the adoption process, along with fertility treatment, for the past year. We had finally found a pregnant woman in Florida who said she wanted us to adopt her baby. The attorney charged a hefty fee and he wanted the full amount in an escrow account before the baby’s birth.

We had a few thousand dollars in savings. We also had about $80,000 equity in our home. And we had 401K accounts.

But rates for home equity lines of credit were high, and borrowing against a 401K is generally bad idea because of penalties and fees. That money was contributed pre-tax, but once you take out a loan, the piper must be paid.

So after much discussion, Jason and I decided to apply for a loan from the Bank of Mom. We proposed a two-year loan at 3.5 percent interest. Jason, an accountant, ran an amortization table. It worked out to twenty-four payments of $1,239. As I said earlier … OUCH!

We could have spread the loan out for longer, but we’re under the impression that children don’t get cheaper as they get older. And we are planning to adopt a second child.

We could have reduced the proposed interest rate, but 3.5 is already so low, further reduction would not cut the payment by much. The reality is $28,500 is a lot of dough, and there is no painless way to pay off such a debt. We are postponing an addition on our house, and I’ll drive the Chevy Malibu I loathe a couple years longer than I’d prefer.