So, we're married, he's in college, I just found a stable, non-soul crushing job, and we inherited a 30 year old mobile home when his mom died. I have no experience or knowledge of dealing with large sums of money, mortgages, investments and such (neither does he) so I'm coming here for guidance and to learn.
The house is on a 30 yr mortgage, 7% interest, and $600 monthly payments and currently has $65k left to pay. We've been putting in $1000/month, taken from an inheritance. It's at a 7% interest rate because the mortgage is held by the former owner instead of a bank, and she refuses to negotiate, refinance, lower the interest rate, etc (kind of obvious, really, as she is benefiting hugely from the high interest rate). To make it not a huge disaster, I've rented out 3 of the 4 bedrooms in this house to reliable people, and thus get $1300 in rent each month, which is enough to cover the mortgage and some of the utilities (but not really maintenance).
So here is our money situation:
Inheritance:
$42k-ish sitting in American Funds, gaining interest and not getting touched.
$29k in the credit union, that we draw on to pay the mortgage and tuition.
Income:
$1,300/month rental income
$1000/month ish from job that I just started.
Debts:
Mortgage: previously mentioned $65k at 7%
We have one credit card that gives 1% back that we use for bills and other essentials that we pay off completely every month.
The two biggest problems I see are the mortgage, and the $29k just sitting in the bank.
Is it possible to go to a bank and take out a mortgage at a presumably lower interest rate and use that to pay off the first mortgage?
As for the pile of money sitting in the bank, I hate it sitting there and not getting any interest, but at the same time, I'd like it available to make mortgage and tuition payments.
What I'm thinking of doing is transferring the mortgage to our credit union, if possible, and then making a huge payment of what ever $29k - 2 year's worth of education costs to the mortgage.
So, oh greatly experienced and wise ones, does that sound like a good idea, or a bad one?