European Stars and Stripes (Newspaper) - December 27, 1991, Darmstadt, Hesse                                Friday december 27. 1991 the stars and stripes a Page 17. Money matters homeowners cautioned on equity Loans by Bill Doyle q. I attended a financial planning seminar where i picked up several sound tips. However 1 question one of those tips. The speakers said you should take out a Home equity loan on your Home and invest that Money. In their words a a this Money is Only collecting  what is your advice a. To ignore that  along with Many at such gatherings it Aims at generating profits a in the form of commissions and feeds a for those running the seminars. Home equity Loans can be Good things for people who have built up substantial equity in their Homes As the result of having made Many mortgage payments and or increases in the value of the properties. That a a Handy Way to borrow. The interest rate on a Home equity loan is usually lower than the Cost of borrowing elsewhere. Also the interest is deductible on your income tax return. However unless you can invest the borrowed Money where it will earn More than the interest on the loan you come out a loser. Done to forget you have to meet the interest payments on a Home equity loan along with regular payments on any mortgage Loans you have. Those Loans Are liens on your Home. If you go too far in Hock you can lose the roof Over your head. Q. I May retire in a couple of years at age 65. My wife and 1 owe about six years on our 8.75 percent Home mortgage. It would not put us in a financial bind to double up on our mortgage payments. By doing that the mortgage would be paid off in about 30 months to coincide with my retirement. May we have your opinion a. Yours is a simple situation. If the Money you have available to double up your mortgage payments is earning More than 8.75 percent leave that Money where it is. If its earning less than 8.75 percent increase your mortgage payments. Just make sure the extra Money you pay in is used to reduce the mortgages unpaid balance which will greatly Speed up the mortgage. Q. Every month 1 invest a set amount of Money into a Mutual fund. 1 reinvest my dividends and capital gains distributions to buy More shares. The funds quarterly report lists its effective earnings As an annual percentage rate. I am trying to determine whether to keep investing in the fund or to use that Money to retire my Home mortgage Early. Considering my regular investments the reinvestment and the funds 8.5 percent sales charge is the funds earning figure comparable to a mortgage interest rate a. No. The fund no doubt reports its a total  that a the percentage gain or loss in share value assuming reinvestment. That number does not adjust Tor sales charges. Those commissions Are levied Only on new purchases such As your monthly investments not on shares you already own or on reinvestment. As Long As the Mutual funds total performance is higher than your mortgage interest rate stay with the fund. C King features Syndicate loan prepayment can improve Homeowner s financial health by the Allentown a morning Call if you Are looking for an effective Way to to Shore up your financial picture then you should consider prepaying your mortgage experts say. Although most homeowners recoil at the thought of sending More Money than their Lender asks for the experts say that even Small prepayments on your mortgage can save tens of thousands of dollars and Cut years off your loan. For example if you pay an extra $25 a month on a 30-year, 10 percent mortgage for $75,000, Vou will save More than $34,000 and Knock More than five years off the Loans term. And in the meantime you will build up equity much faster than under the Standard mortgage terms. A the message is drilled into our Heads that we can get whatever we want if we finance  said Marc Eisenson author of the mortgage prepaying guide. The bunkers secret. A if you want a House just borrow the Money and make the monthly payment for 30 years. A what we never were taught is that the time is a maximum and the monthly amount is a  you have a 0.5 percent 30-year mortgage for $125,000? pay an extra $50 each month and you will save More than $58,600 and pay off the loan 69 months a More than 5.5 years a Early. If its a $50,oik30-year loan at 9 percent put an extra $25 in the mail every month and you save $24,713 and make the final payment 78 months shy of 30 years. A once you show people the numbers and explain it to them they re amazed at How much it takes off the mortgage a said Joseph j. Peischl of Lehigh Valley Home funding corp. In Allentown a. Although prepaying is practice by Only a tiny fraction of homeowners sex financial advice for the new year with the new year and its resolutions around the Corner financial experts have come up with several profitable ideas that Resolution makers should consider in 1992. Q credit cards the experts say you should Zero in on the credit card balance. Quot it does no to make sense to borrow at a whopping 18 percent to 22 percent especially since the interest in t even deductible anymore Quot says Esther Berger of pain Webber inc. Q savings advisers suggest that you look for a structured setup that provides a lot of built in discipline. One prime candidate is employer sponsored 401 k retirement plans. These offer current tax benefits and generous upper limits on the amount of your yearly contribution. Organizing the advisers suggest that now is the time to tidy up your finances. Quot with interest rates declining Quot Berger says Quot it s time to take Stock of where your Money is and How hard it s working for  source the associated press ports say it is garnering More attention As americans become increasingly concerned about carrying debt. It is based on a fairly simple formula. Every time you kick in More toward your principal you reduce the amount of interest you will pay and hike up your stake in the House. While prepaying wont lower the interest rate or change your Standard monthly payment it could have a big Impact on the largest figure in your mortgage papers the total amount you will repay. Quot when we agree to take out a loan for a House we contract to pay 2v to three times the amount we borrow Quot Eisenson said. A we end up owning three houses for the Price of one two of which my banker must live in because i know is amps  Here is what the numbers look like on the $75,000, 10 percent mortgage mentioned earlier after 30 years you will have paid $236,000. That a More than $160,000 in interest. Lehigh Valley Home funding s in Beisehl said an increasing number of homeowners Are refinancing their mortgages with 30-year Loans and then paying them Hack As if they were 15-year Loans which carry lower interest rates and higher payments. On a $i00, he30-year mortgage at 8.5 percent you will repay about $277,000. On the same loan for 15 years you will repay about $ i77, ki0. A a Pischl asked Quot which one would you rather pay Hack Quot advised questions can torpedo opportunities during Job interview new York apr if you want a Job in this Economy give the right answers at your interview a and done task the wrong questions. Done task As have some candidates for executive positions if the company will pay to move your Tombstone collection if the health insurance policy covers dog grooming if you can have a $40,000 loan to get out of debt. Although Job interview s do give a prospective employee a Chance to ask important questions about a prospective employer a Survey by the association of corporate amp professional recruiters suggests that some candidates take things Loo far. The association asked its 600 members half of them executive recruiters and half personnel executives to list Quot the most unusual puzzling or amazing questions a they d been asked by a Job candidate. Among the replies a Quot what is it that you people do at this company a a Quot Why Arentt Vou in a More interesting business a a Quot what is your Mono a a Quot what Are the Zodiac signs of the Board members a a to Bennett a member of the recruiting associations Board said such questions you cant be flip anymore and you have to be careful with  to Bennett member of a recruiting association s Board Are particularly ill advised in the midst of a recession. A a there san oversupply of executives so interviewers Are looking for reasons to exclude candidates. You can t be flip anymore. And you have to be careful with humor. Humor in an interview is a dangerous  however humor does no to explain Why so Many inappropriate questions involve moving expenses. Prospective employees have asked companies to relocate a horse a Tombstone collection fruit Trees and a 2-lon Rock Garden. One applicant apparently fluent in the jargon of moving asked a will they flatbed my porsche from California to Maryland Quot animals also seem to be a problem. Two different executives said applicants had asked if the company would move their pet sheep one of which was pregnant. Another recalled being asked a does your health insurance cover dog grooming Quot the problem is not always the question itself bul rather the sin weakness or character flaw it exposes. A Why do you want references Quot sounds paranoid. To ask two minutes into the interview Quot what is the vacation schedule a indicates sloth. Asking Quot do you think they would he willing to lower the compensation Quot or a Why would you hire someone like me Quot betrays a Lack of self Confidence. One applicant asked for a a $40,000 loan to help get himself out of  he did t get the loan and he did no to get the Joh. Some questions got personal. Several hiring executives said they were asked How much they earned and one reported being asked a i know this is off the subject but will you marry me a the answer was no. The wrong question can end an interview As in a does the company have a policy regarding whether or not employees can carry guns Quot and it can end it before it starts. One while scheduling the meeting asked a do i have to dress Lor the interview Quot