A tough find: mortgages that run less than 15 years

QWhy don't we see a choice on fixed-rate mortgage-term lengths other than 15 or 30 years? I can't find anyone offering a 10-year (or shorter-term) mortgage.

K.T., via e-mail

AMortgage bankers write 15- and 30-year mortgages because of the secondary mortgage market, says Jay Brinkmann, an economist with the Mortgage Bankers Association in Washington. On the secondary market, underwriters scoop up bundles of mortgages for "packages," which are resold to investors. They like all the pieces to be similar for bookkeeping purposes.

"A 10-year mortgage would be a sort of an odd duck to package," laughs Mr. Brinkmann. Some banks, he notes, do issue 20-year fixed-term mortgages. Brinkmann's suggestion: Take out a 15-year mortgage, then pay it off at the 10-year rate. The difference in rates between 10 and 15 years will probably not be that much, he adds.

QI am a retired person on Social Security and a small pension. I have three fixed-term CDs that come up for renewal this month. Please give me some alternatives for getting better interest returns, while ensuring safety.

B.L., Niceville, Fla.

A"CD rates are not very good now, and probably will stay low for some time, so put your assets in a solid money-market account until rates start rising again," says Paula Hogan, a financial planner in Milwaukee. Once rates start going up, "look for higher-yielding investments," such as stock funds, bank CDs, or bonds, she says.

QIf I start a Coverdell education IRA for my daughter, who owns it, me or my daughter? What about a 529 plan? One financial publication I read says the money in a 529 isn't considered part of my estate for estate-planning purposes. Whose estate is it a part of? My daughter's?

R.C., Milton, Mass.

A The Coverdell Education Savings Account (formerly known as an education IRA) is a custodial trust. It is not "owned" as such until the assets are distributed, says Joseph F. Hurley, author of "The Best Way To Save For College - A Complete Guide To 529 Plans." The custodian of the account, however, does control the account until the beneficiary turns 18.

A 529 savings plan is owned by the parent setting up the account. If the parent dies, there will be a designated successor owner. If the beneficiary dies, it becomes part of the beneficiary's estate, Mr. Hurley says.

Questions about finances? Write:

Guy Halverson

The Christian Science Monitor

500 Fifth Ave., Suite 1845

New York, NY 10110


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