Numbers don’t agree on when mortgage will be paid off

Q. I have had a small home mortgage with a bank for 12 years, and I’ve been making double payments every month to pay it off early (no prepayment penalty).

Several years ago, a reliable friend who owns her own mortgage company ran the amortization for me to determine approximately when my loan would be paid off. She told me the principal and interest should be paid off after 11 years, and I was pleased. However, now I’m rather concerned because according to the bank, I still owe thousands of dollars.

Either my friend’s calculations were way off or the bank is taking me to the cleaners. Is there a reliable, disinterested third party who can investigate this matter and run the numbers? If the bank’s numbers are incorrect, what could I do about it? What would you do?

I’m 67 and hoping to be free and clear of this loan soon in the event that I choose to retire. Other than this note hanging over my head, I’m living debt-free, quite comfortably, with two Roths.

A. Clearly, there is an error here. The first thing I would do is ask the reliable friend to come over and sit down with you and go over all the numbers. At the same time, contact the bank and explain that you want to find out exactly where the money that you “double-paid” has been credited and where your account stands now.

The likelihood is that they’re going to have a big difference in numbers. In the event that you can’t work it out yourself, you might want to hire a CPA to go over both sets of numbers.

Q. Philadelphia and New York City have proposed or enacted bills to prohibit employers from inquiring about salary history. Politicians believe asking about salary history is discrimination. As a businessman and a former politician, how do you feel about this?

A. Frankly, I have no problem with a prospective employer asking how much you’re earning. Proponents of the bills claim that it’s discrimination, but I see no justification for that. As a businessman and a former politician, I believe those cities made a serious mistake, and I think they will eventually come to that conclusion and rethink their position on this matter.

Q. In the late 1970s and early 1980s, we gave each of our three children a $10,000 interest-free loan for the purchase of three homes in California, with the understanding that if and when they sold their homes, they would repay us. Two of the three did indeed sell within five years, and the loans were repaid. The third, however, has never sold, is still living in the original home and, therefore, has never repaid us.

We are in the process of making out a new will and getting our estate in order and are unsure of how to proceed. Given the devaluation of the dollar since 1979, and the fact that this property has increased in value, what do you feel would be a fair and equitable division of our assets among the three?

A. Apparently there was no time period in the arrangement you made with the kids; the terms were that they pay back the loan when they sell. In my opinion, for the relatively modest amount of money, I would just go back to your kid and say you still expect to be paid when the house is sold. As to working out the nickels and dimes in terms of devaluation and property value, I would forget it. I would make it as simple as possible.

Send questions to bruce@brucewilliams.com. Questions of general interest may be answered in future columns. Owing to the volume of mail, personal replies cannot be provided. The Bruce Williams Radio Show can now be heard 24/7 via iTunes and at www.taeradio.com. It is also available at www.brucewilliams.com.

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