Mortgage Recast
Categories: Mortgage
See: Mortgage.
Mortgage recasting sounds like a dream: get lower monthly payments and pay less total interest. Usually, you can’t have your cake and eat it too. You can either get lower monthly payments, but pay more interest (and usually over a longer term), or take the hit of higher monthly payments, but pay less interest overall.
But how?
Well, mortgage recasting isn’t magic, although it sounds like a Harry Potter-mortgage cocktail. The major string attached is that you make a big lump-sum payment toward the principal of the mortgage. Then your mortgage is recast, with lower monthly payments and newly calculated interest (which will be lower since you owe less now, and since the mortgage term remains the same as it was before).
A mortgage recast is kind of like making a really big additional payment, except it’s its own process, interest is recalculated, and there’s a smallish fee attached to do the work of the recast.