DEAR BRUCE: I recently came into some money, and I am thinking of paying off my second mortgage. I have two 30-year fixed mortgages at 5.375 percent. The first is conventional in terms of monthly payments. However, with the second mortgage, I have about nine years before I start paying on principal. Would it be wise to pay off the second mortgage now? Thanks in advance. -- M.M., via e-mail
DEAR M.M.: I am very much opposed to interest-only mortgages. If there is a prohibition about reducing principal on that mortgage, then I would double up or more the principal reduction on your other mortgage. You didn't indicate what the interest rate on your second mortgage is, but I suspect that it is higher than the 5.375 percent that you're paying on the 30-year mortgage. You might wish to start paying that down more quickly. Either way, unless you are an extraordinarily sophisticated investor, interest-only mortgages will eventually come back and bite you hard.
DEAR BRUCE: My husband's brother has power of attorney over his mother's accounts. His father made it that way before he died. She wanted both sons to look over her accounts. The other brother put a stop to that. He wanted to be the only one in control of the money. So, he has now contacted my husband and said he gets more of the money because he is power of attorney. I thought only the executive of the will receives a percentage? He has been moving money around already without talking to anyone. -- T.D., via e-mail
DEAR T.D.: We're throwing a lot of terms around here. First, a power of attorney, in the absence of a specific contract, does not call for any stipend to be paid to the power of attorney. You say you thought the "executor" of a will receives a percentage. This can be the case, but more often for a family member who becomes the executor/executrix, it will very regularly say to "server without bond or compensation." Nonetheless, he doesn't have to talk to anyone in terms of moving money around, but he most surely cannot put that money in a situation where he is a beneficiary or receives a benefit. If there are substantial sums involved, your husband might wish to see an attorney and have the court demand an accounting from your brother-in-law. This doesn't do much for family relationships but this is why when giving powers of attorney, naming beneficiaries, executors, etc., the entire family should be notified as to what you are doing and why.