What Is A Mortgage Recast?
How Does It Work? – How Much Will It Cost?
A mortgage recast is when you make a lump-sum payment toward the principal balance of your loan. Your lender will then re-amortize your mortgage — your loan will now have a new (lower) balance.
The result is a lower monthly mortgage payment, but your interest rate and term remain the same.
A recast can also works should a person receive a large amount of money. For example, a homeowner receives an inheritance or a large bonus from work.
They use the “windfall” cash to reduce their home mortgage and have the mortgage “recast”.
How Does Mortgage Recasting Work?
The specifics can vary by lender, but here …