I received a phone call from a client this past week asking “Can I lower my monthly mortgage payment without refinancing?” He has a 4.125% interest rate, so he does not want to refinance and get rid of the current low rate he has. But he does want to see if he can get a lower monthly mortgage P&I payment. His thought was to put a chunk of money down to reduce his mortgage and therefore his monthly P&I payment. I explained that Fannie Mae and Freddie Mac do allow a ‘recast’ option that would allow him to put a lump sum down and recast/reamortize his mortgage. Doing so would then indeed allow him to get a lower monthly mortgage P&I payment.

But then I shared with him that old saying, “Just because you can do something doesn’t mean you should do something.” Instead of paying down the mortgage on your very low (tax deductible) mortgage rate, maybe that money is more valuable somewhere else. Maybe paying off other high interest rate debt, shoring up your rainy day cash fun or investing it for future financial goals would be better suited.


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