Opinions on recent windfall

I’m looking for some outside opinions on what to do with a recent windfall of about $175,000.

I’m 36 years old, married, and my first child is due later this year. I own a home worth roughly $725,000 and currently owe about $580,000 on the mortgage. The mortgage payment is high (around $5,800/month including taxes and insurance), and I have about 14 years remaining at 5.5% interest.

My current net worth is approximately:

$655,000 stock market

$50,000 money market

$340,000 in real estate equity

$300,000 in other assets related to my business

$50,000 Gold/silver

Income is about 300k annually

Recasting my mortgage is really appealing to me because this mortgage hits like a whale every month. I could save 1,500 a month and have better piece of mind that I could make these payments even in deep recession. I understand returns are generally better in the market

Another option is to seed a 529 college fund for my newborn. I was thinking about seeding it with 40k so hopefully there is a healthy chunk there 18 years from now. This windfall is coming tax free. Are there tax advantages to using my earned income over this windfall amount?

What do you guys think?