Dear Harry:

My wife and I have just saved her grandfather's house from foreclosure so he could continue to live there. It took us two years to get the house titled in my wife's name and to have two liens from predatory lenders removed. There is a mortgage for $51,000 that was also transferred to her, and there's still one lien from the electric company that we want to get rid of. They're hitting us with stiff interest, too. The problem is that we need $19,000 to do this, and our savings are getting a bit low. The house is worth close to $100,000. Is it better to get a home-equity loan or try to refinance the mortgage? The rate on the present mortgage is 5.25 percent and we're able to make the payments easily.

What Harry says: I do not like the idea of changing a current debt (the electric bill) into a long-term debt. There are exceptions to this, primarily when the interest rate on a new mortgage would be appreciably less than on a home-equity loan. With your present rate of 5.25 percent, a new mortgage won't get you much, if any, interest saving, and it will have substantial settlement costs up front. Get a home-equity loan and pay it off as quickly as you can. Can her grandfather contribute something to the repayment or the mortgage? Hats off to you for what you're doing.

Write Harry Gross c/o the Daily News, 400 N. Broad St., Philadelphia, PA 19130. Harry urges all his readers to give blood - contact the American Red Cross at 800-GIVE LIFE.