DON'T PAY TOO FAST.

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Author: L. S.

MORTGAGES

PREPAYING YOUR mortgage was a great financial strategy in the 1990s, when interest rates topped 10 percent. But with many borrowers sitting on 5 percent and 6 percent loans, there are now better places to stash your cash. To start, wipe out that credit-card debt and feed your retirement account. Build a rainy-day fund, save for college and buy yourself enough disability and life insurance. Then it's time to look at the mortgage. Got a fixed 6.5 percent rate? You could probably do better, in the long term, in a low-cost diversified mutual fund. Finally, if you fell for one of those variable-rate, interest-only, negative amortization mortgages that were being pushed last year, prepay as soon as possible by refinancing to a more stable loan.

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By L. S.