I don't believe that would automatically reduce it...I would suggest you call your lender and ask them.Lori

some lenders will allow a one time principal reduction and then modify the loan note to adjust the payments downward. This will depend on your loan servicers policies. You should contact your lender and see if they are able to do that or not. If not you would need to do a full refinance. With rates being as low as they are it may still be worth doing. It may also be worth paying down the loan and do a refinance to a shorter term (ie. 30 year fixed to a 15 year fixed) which may not raise your payments and save you a lot of money over the term of your loan.

Hello!Your question leads to several others...Your main questions is whether or not your current bank will re-caste your loan. Some do some don't. If they do, typically they'll want to see a significant pay down of 20% or so and the admin fee to get done migt be around $500. The bigger question is, what is the best thing to do with your $60,000??? I would have to know more about your budget, debts, disposable income, etc. Any conversation about this should also have your Financial Advisor involved. This can't simply be answered by a Loan Officer.Let me know if I can help?

This is called Re Casting call you're lender and obtain written proof of a payment reduction.