DEAR BRUCE: My wife and I have been married for a few years. We are both in our late 20s. We live in my mother-in-law’s home, paying her a pittance ($300) for rent. It is very affordable and would even accommodate a family if we choose to have children later on. It’s a great home and meets every need but I am concerned about the future. I don’t want to pay rent for the rest of our lives and have nothing to show for it. All this money that we have been paying out could be used for a down payment on a home of our own. We feel that we can handle a mortgage in the $850 a month range. Would we be better off in the long run to pay the low rent and invest the money, or buy a house and have little to invest? — Reader, via e-mail

DEAR READER.: You are talking in terms of $6,600 a year increase in the cost of shelter. On top of the mortgage payment you will likely have insurance and taxes, which must be folded into the $850. At the end of a 10-year period you could invest the difference of $66,000 plus, which should easily have grown to more than $100,000. There is no way on a $850 monthly mortgage payment that your equity would grown to anything like that. You’re comfortable where you are, you are getting a HUGE bargain. This is one of those cases where if it’s not broken please don’t fix it!

DEAR BRUCE: I’m a homeowner with $35,000 in student loans. I have been denied refinancing due to my income-to-debt ratio, even though I have a decent credit rating. These loans are causing interest rates on my credit cards to increase. Why am I penalized for bettering myself? – Reader, via e-mail

DEAR READER: When looking over someone’s credit history, lenders are concerned about a number of things. In addition, they want to be certain that the income of the borrower is sufficient to pay off all of his or her obligations. There is some concern that your debt of $35,000, in addition to your home, automobile, etc., exceeds your ability to comfortably repay. You are not being penalized for bettering yourself, but the piper has to be paid. Sit tight for maybe another two or three years until you have reduced your indebtedness. As your obligations decrease, you will be far better able to find lenders who will be happy to extend that credit.

Send your questions to: Smart Money, P.O. Box 2095, Elfers, FL 34680. E-mail to: Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.