My credit union that I have my mortgage with has reached out to me to possibly do a loan modification. I currently owe 61k on my house and have 64 payments remaining. They said for a $300 fee they will lower my rate down to 2.1% and put me on a 60 month term. It's not a huge savings in interest as I'm currently at 2.6%, but it will lower my monthly payment about $320. They own the mortgage so no credit checks or anything like that. Basically pay the fee sign 2 or 3 documents and be done with it. In the past I've told myself when my balance gets to 50k I might just pay it off cash just so I could tell myself I have a paid off home...but I know it would hurt me mentally dropping that much cash. Basically I'd use my emergency fund to pay off the house and then rebuild that. I'm well aware I keep to much cash on hand, but it's just something I've always done. So what would everyone else do in my situation?
