Recasting Your Mortgage: What are the Pros and Cons?

One of the most commonly talked about tools for paying off your mortgage early is refinancing. Let’s explore a less common tool that can be just as powerful: recasting your mortgage.
After learning what a mortgage recast is and investigating how recasting is different from refinancing, we will dig into the pros and cons of recasting your mortgage to help you decide if this real estate strategy is right for you.
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CHAPTERS
0:00 Intro
0:48 What is recasting your mortgage?
1:03 How do you recast your mortgage?
3:02 Request a Recast
3:37 Make a Lump Sum Payment
3:57 Pay a Servicing Fee
4:14 Move to Your New Repayment Schedule
4:39 Put Your Money to Work
7:00 Pros of Recast
8:18 Cons of Recast

#MortgageRecast #RecastingMortgage #DebtFreeCommunty #MortgageFree #PersonalFinance

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[MarriageKidsandMoney]

What do you think of recasting your mortgage?

[GSum-sqdp]

I’ve been paying a lot extra every month on my 10 year mortgage that I refinanced 1 1/2 years ago at 2.125%. I’ve paid an extra $33k and owe about 104k still. My goal was to pay off the mortgage early. Now that rates are going up I have the option to recast and save about $350 a month that I could invest in something with much higher interest. I’m leaning towards recasting.

[classicrise]

Best video I have seen on recasting! Most people who think they know about recasting actually don't know about recasting.

[nealsorensen]

I had never heard of this before. This makes extra mortgage payments even more advantageous. Thank you!

[monicaambs]

This is not available in Canada but I have refinanced. It cost about $800.00. I was surprised that you didn’t suggest adding that extra $200 to your mortgage in addition to the other suggestions like vacations.

[Nixonskitchen]

Just make lump sum payment. You do not need a recast. The goal is to pay off your mortgage quickly.

[matthewkmacdonald]

This was a great explanation and super helpful. Thank you!

[Shegonnabeamillonaire]

This is exactly what I am planning on doing! I appreciate this video. It was very informative..

[alipainting]

I noticed in my recast paperwork that after the recast the mortgage will become no longer assumable. So when my daughter inherits my place she will need a new mortgage for the balance at whatever interest rate is at the time. Something to consider.

[apthy]

How would recasting with lump sums combined with continued extra principal payments work out versus just bigger extra principal payments? Is there a golden ratio that exists between them?

[armenassaturian]

I'd rather pay off the principle with that lump sum than get a recast. Shortening time saves you money on interest

[moutasemakkad]

What is the difference between recasting vs paying monthly "Extra principle"? For example, let's say I want to allocate $5000 extra for my mortgage payments a month. Would it be better to wait for a year to have a lump sump of $60k that I can pay in one shot or should i pay those extra monthly payments month by month?

[AccordingToTawanda]

Hello,

Question: We are currently paying down our mortgage. Purchased I’m July 2021. Loan amount $291, 000. As of today we have gotten our loan to $243, 000. Should we consider a recast?

[stephbyerly]

Thanks for this! I have refinanced my house multiple times, and I cannot believe I've never heard of recasting! It's not exactly something the lenders tell you about, is it? 🤔

[miranda]

Recasting might be an option in the future. Would it make sense to do it if your job relocates down the road and you don’t follow? The job you lost is unique in which you won’t be able to replace most of that income. . You have a large chunk of money saved and will need to lower your payment so you can continue to afford your mortgage. Thoughts?

[ppia]

Is it worth recasting to put the extra money saved strait into principle?

[luismayo]

lets say you start off a mortgage at 200, 000 for 30 years, monthly payment is 1, 400. Within the first two year, you add an extra 60k toward the principal, bringing down length of the mortgage from 30 to 20 years. Recasting the mortgage will get the monthly payment down but the length of the mortgage will increase to 28 years. is that correct?

[Palantir_Daily]

When you restart the amortization schedule you may pay less per month, but the a percentage of interest to principal resets as well. If you’re 15 years into a 30 year mortgage and 50% of each payment is going to interest then if you recast it you’re resetting it so now each payment you make may have 90% going to interest.

If you recast the amount you pay monthly decreases, but the total price over the life of the loan increases. I’m not quite sure how that would help you pay the principal off faster.

[philmirez]

Where and when did you buy a home for 195, 000? Also, what did you buy? My wife and I are putting in offers for 2200 sq ft 4 bedroom homes in Fairfax and getting outbid. The winning bids are going well over $50k above the asking price. It’s wild.

[diego]

Example 200k loan 30 year fixed rate ive had it for 1 year but i paid an extra 10k so now the loan will be paid off in 23 years.

If i recast lets say another 10k will it start my loan all over from the 29 year mark or will it continue from the 23 year because i previously put an extra 10k on it? Or will it drop from 23 years to lets say 18 years and lower the payment?