![]() ![]() ![]() That means you’ll still be with the same lender and you’ll still have the same interest rate and loan terms. “A mortgage recast just affects the current loan that you’re in,” says Tassone. So, if you’ve recently come into a large sum of money, or if you have a loan with a high interest rate but you don’t want to refinance, you might benefit from a mortgage recast.Īlthough they sound similar, mortgage recasting and mortgage refinancing are two completely different things. Recasting with $10,000 down (and assuming a recasting fee of around $250) you could end up saving upward of $5,000 in interest and $55 per month for your mortgage payments. ![]() And you’ll also pay less interest over the lifespan of your loan, which can result in major savings.įor example: If someone has a $200,000 mortgage at 4% interest rate (with a down payment of 10%), their monthly payments would be around $1,066. The end result is a lower monthly payment. “It’s as if you started the mortgage with that lower balance,” says Tassone. The benefit of a recast is that you get a new amortization table based on where you are in your payment schedule. Once you make that payment, your mortgage is recalculated with the remaining balance over the remaining months in your loan. “Different lenders have different requirements for this option, but you’re usually looking at a minimum amount of at least $5,000,” says Tassone. Your loan amortization schedule dictates how much you pay monthly and how much interest you’ll pay over the course of the loan recasting your mortgage could make both of those numbers go down. If you’re unable to get approved, a mortgage recast could be your best bet.Ī mortgage recast is when you make a large payment toward the principal amount of your mortgage - and in turn, your lender recalculates any remaining payments based on the new, lower balance. However, lenders are tightening their approval standards, so it’s more difficult to qualify for a refinance. “In a low-rate environment, refinancing usually seems like a good option,” says Mike Tassone, co-founder of Own Up, a lender-comparison platform. Right now, we’re in a unique situation where interest rates are low and the real estate market is hot and active despite a recession. But if you’ve got the money, a mortgage recast could reduce your monthly payments and help you pay off your home faster. The catch? You’ve got to have a large sum of money on hand to put toward your mortgage balance. Of all the ways to reduce your monthly mortgage payment, recasting might be the simplest. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |