A mortgage recast is when your lender recalculates the monthly payments on your current loan based on the outstanding balance and remaining term. Keep in mind that recasts are not automatic and aren’t offered by all lenders. Mortgage recasts might be a good idea if you received a large windfall of money and applied it to your mortgage balance, or if mortgage rates have increased or if you are moving. The advantages of a mortgage recast include no credit checks, less money paid towards interest, no closing costs, no extension on the term of your original loan, keeping your current interest rate, and no lengthy application process. Disadvantages might include the inability to take any equity out and lender specific restrictions. There is typically a service charge associated with a recast from a lender which could be several hundred dollars. I’m Stewart Brown, a licensed Mortgage Loan Originator in Palm Springs, California here to simply topics in Real Estate and Mortgage Lending. Please, like, share, follow and subscribe!
