#Recast mortgage payment calculator series#

Keep in mind that not all lenders provide the option of mortgage recasting. You might not be eligible for this option if you have past-due accounts or late payments. To be eligible for recasting, you must make your mortgage payments on time and have a solid payment history. Only once you are ready with $20,000, pay it against your principal amount. Lenders may set a recast limit, say $20,000. So, you need to speak to your lender before deciding on the recasting process. Minimum Principal ReductionĮvery lender has minimum outstanding criteria for recasting. Loans like the United States Department of Agriculture (USDA) or the Department of Veterans Affairs (VA) cannot be recast. Not all mortgages are eligible for recasting. There are certain requirements you must fulfill, in order to qualify for mortgage recasting. The service fee varies from lender to lender. Step 3: The lender charges servicing fees: Lenders will charge a flat service fee for the recasting process. After payment, the lender will modify the repayment plan to reflect your new monthly commitments.

#Recast mortgage payment calculator series#

Step 2: The lender reamortizes your balance: Mortgage amortization refers to the process of paying off a mortgage loan through a series of regular payments over a fixed period of time. This amount is deposited in your loan account against the principal loan value. Step 1: The homeowner makes a payment: As the homeowner, you first pay the lender’s pre-decided minimum amount. Although there might be some additional tasks that may differ from lender to lender. Listed below are steps for recasting a mortgage. Say, you got a huge bonus at work, use some of it to recast your mortgage! How Does Recasting A Mortgage Work? Once the mortgage is recast your monthly payment will come down to $840!Ĭonsider a mortgage recast if you have unexpected cash in your hands. If you decide to pay a lump sum of $40,000, your new loan amount to $160,000. Your monthly mortgage payment will be around $1,072.43. Say, you have a 30-year mortgage tenure for $200,000 and a 4.99% interest rate. However, some government loans like the Federal Housing Administration (FHA) or Department of Veterans Affairs (VA) do not allow recasting mortgages. It is a good option if you do not have a cash flow issue. What does Recast Mortgage mean?Ī Recast mortgage is a strategy where the loan borrower pays a lumpsum amount towards their mortgage principal. Keep in mind, recasting the mortgage will not lower the interest rate or repayment term. The mortgage lender will recalculate the mortgage amount and lower your monthly payment. If you have extra cash in hand, put it towards your principal amount. At that rate, I wouldn't, but that's up to you.High mortgage payments can derail your monthly budget making it impossible to enjoy the little joys of life. If you're set on getting it paid off early, then make a one time principal payment of 10k. Such a recast won't shave much off your payment and the payoff date will be the same.

The bulk of your payment is going to principal already. That means you have 8 or so years left on your loan. Either that, or you've been pre-paying a lot. You don't state your orig term but if you've gone from 408k to 235k in 7 years, that leads me to believe it's a 15 year note.

I am not sure I trust the online calculators.Īssuming I have a healthy emergency fund of 1 year expenses, and I could expect to pay off this mortgage in the next 4-5 years by prepaying the remainder of the principal, is it even worth it to recast?įurther, I don't understand what you want to accomplish. Here are my mortgage details.Īmount of additional principal I could put down for recast: $10,000Ĭan someone help me calculate what the recasted payment would be? I have seen recasts explained many different ways and just want to make sure I am considering the right numbers.

I have tried several online mortgage recast calculators, but I am not sure they are right as the recasted payments are not as low as I expected. I am deciding whether to recast my mortgage. I'm hoping that you can help me with what I hope should be a simple question.