Taking 50k off Principal?

I bought a house with a friend.She has a steady enough job in a solicitors firm earning around 45k.We owe 195,000 on our house at present.I am being let go at the end of this month.I know it will be difficult for me to find another job as it is in construction.We both have 25k each in savings and i have another 25k in credit union.We were thinking we should take 50k off principle of our mortgage?Would this be a good idea at the moment?Or should we hang onto the cash?Any idea's? Thanks.

Re: Taking 50k off Principle?

I would say hold onto the cash until you find another job. It's all well and good to reduce the mortgage but it is more important to have the capacity to make the monthly repayments.

Re: Taking 50k off Principle?

I agree. I think it is best you hold onto your cash in case it takes you longer than thought to find work. Best of luck.

Re: Taking 50k off Principle?

I agree with Norfbank. This is your rainy day. You have an umbrella. Don't throw it away.
e.g. Knocking €50k off a €195,000 mortgage over 30 years at 5.25% will reduce the mortgage from €1076 to €800. That will save you €138 a month only and leave you without the ability to make further monthly payments.

Thanks lads thats made my mind up!

Also Paddy, make sure that you are getting the maximum return on the 50K savings you have.

If there is not a reason to keep your 25k in the CU (loan etc.), then I am certain you could get a better interest rate elsewhere.