Answering Your Questions

Hi Carmen,
My husband and I have some money we have been saving and would like to invest it somehow. We have a HELOC on our home w/ a variable rate which is pretty low right now. The money is only enough to pay off 1/5 of the second. Everyone has been giving a different advice from "don't invest when you have this second mortgage you should pay off", to "if you invest properly you will make more and be able to pay off your 2nd sooner".

We have no credit card debt, but we do have auto loans which currently have higher rates than our second.

We know that circumstances can be different for everyone, but do you have any advice for us? Any input would be appreciated. --Denise, CO

Denise - Though your HELOC has a great rate now, we don't know which way rates are headed in the future. If inflation--real inflation--starts rearing its ugly head, the Fed will raise rates and that HELOC will get more and more pricey. So, go ahead and pay off as much of that HELOC as possible. These loans are like credit cards tied to your house and you shouldn't like any debt tied to your house outside of your mortgage. Also - think about paying off your cars as well or refinancing them at a better rate. Without knowing exactly how much you have in cash vs. on your loans, it's up to you to weigh - keep me posted! --C

Hi Carmen,
I am a college student who constantly has to take out student loans to pay for school. I don't want to have a lot of debt would I graduate. So how would you suggest I find a better way to pay for my tuition? --Lavall, MI

Lavall - the only way short of extortion or street-corner pharmaceuticals (don't do it!) to pay for tuition outside of cash, checks, and loans are grants and scholarships. Head to and dig, dig, dig for applications that you're most likely to qualify for and benefit from. --C

Dear Carmen,
Is it advisable to cash in a 20 year old variable annuity since I have capital losses so far this year? I am over 60 years old. --GK, NY

GK - Annuities are tricky - how much do you need it? Will it cost you more to hold onto it or can you wait it out for a while? A good five years it may take to ride out this market--does that work for you? --C

Hello Carmen,
I am a civilian working at an Army Education Center in Afghanistan. For the last two years nearly all university employees have been having trouble with TIAA-CREF doing accurate accounting, to the point that when I changed employers I filed the paper work for a rollover from a 403B to an IRA. For the first transaction, TIAA-CREF pulled $12,761.34 from my account, but the rollover check was for only $8,376.11. The missing $4,385.23 being much more than the 2.5% surrender fee. When I called and requested this be corrected, TIAA-CREF took out another $3,449.76 the next day. I know they are a big outfit with many, many lawyers and I'm a small-fry, but I don't wish to just sit by and watch them steal more of my retirement. What should I do? --Paul, Afghanistan

Paul - Oh no! They should NOT be withdrawing more money than they're allowed to. Make sure you keep a paper trail on this boondoggle and get in writing where that money went. I know it's a pain--why should we have to spend our time fixing their mistakes?--but it is your money and you've got to track it down. Call every day if you have to and for some clues as to best deal with customer service, head to our buddies at Consumerist. They've got some great notes/scripts that anyone can use.. --C

We have a great mortgage fixed at 4.75% and we owe $245,000. We also have a HELOC for $50000. The first loan began at 270000 and has steadily gone down but the HELOC has stayed the same for the past year and half because all we pay is the minimum finance. The variable rate is now at 4.6% and my payment is $230. Our question is this, our salaries have increased and we will have an extra $500 dollars monthly. We don't want to touch the first mortgage so should we pay the $500 dollars towards the HELOC or invest the money in an IRA or other form of investment. Thanks for your help! --Julio, FL

Julio - Great question. Yup, that HELOC doesn't go down unless you pay more--usually much more--than the minimum every month. They make it that way. If you're both fully invested in your 401k's, I'd definitely put more money toward that HELOC every month. HELOC's are like credit cards tied to the roof over your heads--and with variable interest rates. Interest rates may go up, and heaven forbid, you may have trouble paying your bills, I'd rather make that HELOC disappear so your home is safe. --C