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Can I put husbands life insurance towards balance of mortgage to lower payments?

Husband recently passed away trying to figure out best way to stay in our home, Would adding large amount of cash (life insuramce) to mortgage balance lower payments?

Public Comments

1. No - prepayment will not lower the monthly payment, it would only pay the loan off sooner. Your other option is to refinance, putting down a larger down payment.
2. Paying down the principal would dramatically shorten the life of the loan, but not lower the payments. You need to talk to your lender about changing the monthly payments. If you have other payments with higher interest rates, pay these first.
3. No, but it would pay off the house sooner. To lower the payments, you're talking about refinancing. You'd have to be able to afford the payments based on your income. My advice, here. You've had a horrible life event here. Don't refinance. Don't do anything. Put that money in a bank account or money market, and just use it as you need it to pay expenses over the coming year. Wait at least six months, and then rethink the situation. Don't rush into anything. If the life insurance isn't enough to flat out pay off the mortgage, eventually you'll have to sell the house if you can't afford the payments. But that's something to worry about LATER, not NOW. For now, go on grieving, and take care of yourself. Don't spend that money all in one place, like paying the mortgage company. You might have a better use for it later, when you're seeing things a bit differently.
4. You would have to refinance in order to lower your payments. If you just pay a bunch of money on your current mortgage it will reduce the principal and the length of the loan, but you will still be on the hook for the same payment. If you want to reduce your mortgage payment you will have to refinance the mortgage. Hopefully with the equity you have in your house and your insurance money you should be able to have a lower mortgage payment.