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The loan appears to be a really good deal at 1.1%, no payment due for 12 months, 30 year term. ...
My question is whether anybody here has any experience with these types of loans. Good deal? Bad deal? Any caveats?


I'd ask whether the loan's interest accrues during the 12 month no payment due period. Also, check into the impact on her credit rating of an outstanding loan (especially of such apparent size) that has had no payments made on it for so long a time. Such no payments due for extended periods, associated with furniture buys, often have negative impacts.

Also, the 1.1% rate seems markedly low for what amounts to a mortgage loan. The IRS might impute the difference between that rate and market rate as income and tax your mother accordingly. On the other hand, the difference might not be enough for the IRS to impute, or as an SBA loan, the question might not even come up. It's worth asking about, though.

Eric Hines
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