Puzzled over which mortgage to pay off

Q I have two mortgages, one on my primary residence that we should be able to pay off within 10 years, and the other on my summer home with a 30-year mortgage. Both have the same interest rate.

I have an additional $200 I would like to regularly pay against my principal. Which is more financially advantageous: should I split it and put half towards each mortgage, or devote all of it to one mortgage first to pay it off and then toward the second mortgage?

R.A., Havre de Grace, Md.

A "I would devote the entire $200 to the mortgage with the smaller balance," says Tim Shmidl, a financial planner with Prism Group in Overland Park, Kan.

"Paying it off would free up one whole payment for you and give you greater flexibility in budgeting," he says.

Q I'm thinking of starting a direct investment plan (DRIP) with an electric utility to add a conservative note to my mutual funds, which are all growth oriented. But electricity stocks are in the doldrums. Are they still good investments?

D.P., Chicago

A Utility stocks have been hit hard by rising interest rates, uncertainty over the impact of deregulation, and the huge flow of investor dollars to technology stocks, says Charles Carlson, editor of the "No-Load Stock Insider," in Hammond, Ind.

"Holding a utility is fine," Mr. Carlson says. They provide "good dividends and some growth." But they are not growth stocks, he adds.

Q I had a will drawn up a couple of years ago. The lawyer advised me to have my bank become the executor. The bank charges 5 percent on the first $100,000, and slightly less thereafter. I have no other assets and no relatives in this country.

Is there anyone beside the bank I can use as executor?

D.W., via e-mail

A "You should be able to have options" in selecting an executor, says Paula Hogan, a financial planner in Milwaukee.

"Perhaps you have a friend you trust, who could be designated as co-trustee. That way, if the bank got out of hand, the co-trustee could move the account elsewhere," she says.

Questions about finances? Write:

Guy Halverson

The Christian Science Monitor

500 Fifth Ave., Suite 1845

New York, NY 10110

E-mail: halversong@csps.com

(c) Copyright 2000. The Christian Science Publishing Society

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