Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open.

How to use proceeds of old house sale shortly after buying new house?
Really this is no different from any kind of large lump sum and having a mortgage.  There are probably many questions and answers on this subject.  It really doesn't matter that the proceeds were the result of a sale, an inheritance would not change the answer. I think it is important to note that the proceeds will not eliminate the house 2 mortgage. A high level choice of investment one makes is between equity (such as stock) and debt investments (such as bonds and mortgages).  You are in a unique case of being able to invest in your own mortgage with no investment fee.  This may tip the scales in favor of paying down the mortgage.   It is difficult to answer in your specific case as we don't know the rest of your finances.  Do you have a sizable 401K that is heavily invested in stocks?  Do you have the need for a college fund?  Do you have an emergency fund?  Do you have a desire to own several homes generating income property? If it was me I'd do the following in order, skipping steps I may have already completed: I've heard that the bank may agree to a "one time adjustment" to lower the payments on Mortgage #2 because of paying a very large payment. Is this something that really happens? I really kind of hate this attitude.  Your goal is to get rid of the mortgage in a timely manner.  Doing such makes paying for kids college a snap, reduces the income one might need in retirement, basically eliminates the need for life insurance, and gives one a whole lot of money to have fun with.