Intrafamily refi forgoes costs, hassle

DEAR BENNY: I am looking into refinancing my Texas home from a 5/1 adjustable-rate mortgage to a fixed-rate. During this process my mother stated that she would lend me the $150,000 to pay off my existing loan and I would pay her back at the current market rate for a 30-year fixed. This would provide her a stable investment, and I can forgo the closing costs, paperwork, appraisal, etc., associated with a refi.

What are the legal implications of this transaction? If I pay off my current loan do I assume title? What paperwork do I have to sign with my mom to validate the transaction and where do we file it? She would have to claim the income; can I still write off the interest as I would do with any other home loan? Is this transaction as simple as it sounds? --Craig

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