Owners must decide whether they want to prepay mortgage

Q. My husband and I are debating whether or not we should pay more toward our principal. We currently have an adjustable-rate, 10-year loan (it'll be eight more years before it can go up) with a 3.25 percent interest rate. He's retired, and I'll retire in about five years. It's more than likely this will not be our final home. What's your opinion?

A. For some homeowners, the advice would be yes, absolutely send in extra to pay that down ahead of time. For others, it'd be no, absolutely not. The answer depends on your overall financial situation, which, of course, I don't know.

Interest rates are going up these days, so it can sometimes be wise to refinance to a fixed-rate loan at this point. As you're locked in for eight years with no rate adjustment, though, we can pretty much ignore that part.

Prepaying your mortgage debt is the equivalent of investing that extra money for a 3.25-percent return. (Income-tax considerations can be pretty much ignored here.)

Whether you should do it or not depends on your other assets, your tolerance for risk and what you'd do with the extra money if you don't use it to pay down the debt ahead of time.

Once you send in an additional payment, you will be unable to access the money in a hurry. So we'd also want to know what cash you may have set aside for emergencies.

Then there's the emotional satisfaction of moving more quickly toward owning your home free and clear of debt, and your anticipated retirement income could make a difference.

So if an investment that pays a guaranteed no-risk 3.5 percent return suits your financial strategy, it's available. It's your decision.

Q. In a question you printed a couple of weeks ago, shouldn't the question have said "assessed value" rather than "accessed value?"

A. Yes, it should've. But I left it that way when I sent it to the syndicate. It's interesting to keep the flavor of the original writer, rather than tidy questions up so they all sound alike. And evidently your paper's copy editor felt the same way - or didn't notice. Thanks for the note.

Q. I have land I've been trying to sell for eight years. I've even tried to find charities that accept real estate donations, with no luck. Is there a way to legally disown property?

A. You can always just stop paying the property taxes. You'll eventually lose ownership, though it may take a few years.

First, though, see whether a neighbor might want that land. Perhaps someone would like to add your parcel to theirs and pay just the legal costs of transferring ownership.

Of course, a property tax foreclosure would show up on your credit report and wouldn't do much for your credit score.

Q. Your advice to contact an independent insurance agent was spot on! Last year, we wanted to buy a home with wood shake shingles. Knowing that shake shingles could be a problem, I immediately contacted our insurance agent. We knew getting fire insurance would be difficult, and we needed it to get a mortgage.

Our broker did a lot of work and finally found a company willing to insure us with a 30-day waiver. It was the only thing we could do. We had 30 days from the day we moved in to replace the roof with composite shingles. After getting a quote from a roofer, we made our offer to the seller, lowering our offer by the cost of re-roofing.

The seller didn't want to accept our offer. But after some back and forth between Realtors, the seller realized they couldn't sell the place with the shake shingle roof, so it was either replace the roof or accept our offer. Our offer was accepted, the roof was replaced and we're enjoying our wonderful home.

A. From what I can find out, there may still be some hope of insuring a building with a wood shingle roof, assuming the roof is less than 25 years old. It'd be expensive and difficult though. And you do need to line up fire insurance in order to place a mortgage loan.

It sounds as if that independent insurance agent did his best for you. Glad it worked out.

• Contact Edith Lank on www.askedith.com, or 240 Hemingway Drive, Rochester NY 14620.

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