Mortgage Recast Revealed: A Must-Know Financial Strategy
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Mortgage Recast Revealed: A Must-Know
Mortgage Recast Revealed: A Must-Know Financial Strategy: What is a Mortgage Recast? Why Do You Need One? How you can Lower Monthly Payments? In this episode of Retirement Daily, Bob Powell and Dana Anspach discuss Mortgage Recasts. Recasting a mortgage involves making a lump-sum payment toward your loan principal, which is then reamortized by your lender at the same interest rate but with a lower monthly payment. Compared to refinancing, recasting avoids fees and a credit check while allowing you to keep your current rate.
To be eligible, you typically need a conventional loan and enough cash to meet your lender's minimum payment requirements. While not all mortgages can be recast, it can benefit homeowners who receive a windfall or want more affordable payments without refinancing. Weigh the pros and cons to see if putting your extra funds toward a mortgage recast or other goal is right for you.
A mortgage recast is a process where the remaining principal balance of a mortgage loan is recalculated and adjusted based on a lump sum payment made by the borrower. This lump sum payment is typically a significant amount of money, but it's not the same as refinancing a mortgage.
Here's how a mortgage recast generally works:
Lump Sum Payment: The borrower makes a substantial lump sum payment towards the principal balance of their mortgage loan. This payment is typically more than the required monthly mortgage payment but can vary depending on the terms of the loan and the lender's policies.
Recalculation of Payments: After the lump sum payment is made, the lender recalculates the monthly mortgage payments based on the new, lower principal balance. The interest rate and the remaining term of the loan remain unchanged.
Lower Monthly Payments: As a result of the recalculation, the borrower's monthly mortgage payments are reduced. The reduction in payments can make the mortgage more affordable for the borrower.
It's important to note that not all mortgage loans are eligible for recasting, and lenders may have specific requirements or fees associated with the process. Additionally, a mortgage recast does not change the interest rate or the remaining term of the loan; it only adjusts the monthly payments based on the new principal balance.
Overall, a mortgage recast can be a useful option for borrowers who have a significant amount of cash available and want to reduce their monthly mortgage payments without going through the process of refinancing.
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7 ماه پیش
در تاریخ 1402/11/09 منتشر شده
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