Can you use "equity" to lower mortgage payment?

I am buying a home that appraised much higher than I am actually paying. Is there a way to use the difference in the appraised value versus the selling price to lower the monthly payments? (Example: House appraised at 200K I am buying it for 150K. Can I use that 50K difference to lower my monthly mortgage payment?) I will be in a 30 yr conventional mortgage at 5.85%. I am looking to live in the home for a while, this is not investment property(buy/fix/flip). Any suggestions are most appreciated.

Probably not. if you're already a Prime borrower (meaning you have good credit), and it sounds like you are with a 5.85% 30yr fixed, the mortgage lender is not going to offer you a lower rate based on the extra equity in your home.

Borrowing against that equity with a home equity line of credit (HELOC) will also not lower your monthly payment, both because by definition it means INCREASING your debt it you take out a HELOC, as well as because HELOCs are always at a higher rate than conventional 30yr mortgages.

HELOCs do have their advantages, however, in terms of flexibility, so its worth looking into getting one for that extra $50K or so that you have in your home. You may never need to draw on it, so simply having a line does not increase your monthly debt, but it allows you to pay quickly, for example, for opportunistic situations. For when that investment property does come along!

Well getting a equity loan has a higher interest rate so you do the math

the answer is much simpler than it's being made out to be...

given the borrowing terms (30 year, 5.85%) your mortgage payment is based on how much you borrow. borrow less, pay less. the more equity you put into the house, or the less you pay for it (and borrow), the less you'll pay. If you paid cash, you wouldn't have a payment at all.

if you're hoping the bank will give you brownie points for getting a good deal, you might be dissappointed.

if you want to lower your payment, you'll have to change the terms of the loan. 5.85% is good, so you'll have to think about interest only or negative amortization loans if you want to mind your cash flow. but be careful - these loans can get you into deep water.