Thanks for the reply mate.
I just came back to post what was done regarding this then saw the post above(thought I would have received an email)
On the other forum where I posted a user " YUPAPA " answered all my questions and provided everything I needed he/she basically spoon fed me which I am grateful for.
Bellow I will paste the code I used as provide to me with no changes.
You can do the following to create a 5G backup disk
dd if=/dev/zero of=/home/backupdisk.img bs=1M count=5000
losetup /dev/loop0 /home/backupdisk.img
mount /dev/loop0 /backup
Use another loop device if loop0 is in use. losetup -a to list all occupied devices.
If you don't need the disk anymore:
losetup -d /dev/loop0
/home/backupdisk.img /backup ext3 defaults,loop 0 0
It all appears to be working for me
but I am yet to reboot the server, so I can not be 100% sure the image will auto remount.