Recast Mortgage Payment Calculator: A Smart Way to Lower Your Monthly Payments

Are you tired of paying a high monthly mortgage payment that's eating into your hard-earned savings? If so, you're not alone. Many homeowners are looking for ways to reduce their monthly payments without refinancing their loan. That's where recasting comes in.

Recasting is a process that allows you to lower your monthly mortgage payment by making a one-time lump sum payment towards your principal balance. This can be especially beneficial for those who want to keep some liquidity and maintain their current low interest rate while reducing their monthly obligation.

According to Joseph Polakovic, owner and CEO of Castle West Financial, many borrowers are good candidates for recasting. However, it's essential to understand the rules and fees associated with this process.

Pros and Cons of Recasting

Before you consider recasting your mortgage, here are some pros and cons to keep in mind:

* Pros:

+ Lower your monthly payment

+ Low up-front cost (a few hundred dollars)

+ Pay less interest over the life of the loan

+ No credit or income re-check required

* Cons:

+ Cannot lower your interest rate

+ Need a large lump-sum payment to be worth it

+ Not all lenders allow recasting

+ May require making a certain number of monthly payments in a row at your current payment amount before recasting

How Recasting Works

The process of recasting is simple. You make a one-time lump sum payment towards your principal balance, and the lender recalculates your monthly payments based on the new balance. This can result in significantly lower monthly payments.

For example, let's say you have an original loan with a balance of $200,000 and a monthly payment of $1,000. If you put an extra $40,000 towards your principal via recasting, your new balance would be $160,000, and your monthly payment could drop to around $700.

Benefits of Recasting

Recasting can have several benefits, including:

* Reduced interest payments: By reducing your principal balance, you'll pay less interest over the life of the loan.

* Lower monthly payments: With a reduced principal balance, your monthly payments will decrease.

* No credit or income re-check required: Unlike refinancing, recasting doesn't require a new credit check or income verification.

Recasting is a smart way to lower your monthly mortgage payment without refinancing. By making a one-time lump sum payment towards your principal balance, you can reduce your monthly payments and pay less interest over the life of the loan. With its low up-front cost and no credit or income re-check required, recasting is an attractive option for homeowners looking to free up more money in their budget.

Get Started with a Recast Mortgage Payment Calculator

To determine if recasting is right for you, use our recast mortgage payment calculator to crunch the numbers. Simply enter your current loan information and the lump sum you plan to pay towards your principal balance. You'll quickly see how recasting can benefit you.

Remember to always review the rules and fees associated with recasting before making a decision. With the right lender and a little planning, you can enjoy lower monthly mortgage payments and a more financially stable future.

Recast mortgage payment calculator