What does it mean to “Recast” your Mortgage?

A mortgage recast is when you make a lump-sum payment toward the principal balance of your loan so you can lower your monthly payment

I hope everyone had a wonderful March and getting excited for the spring! Now that we are emerging from our hibernation, things are getting very busy. I have recently put multiple properties on the market and have had multiple buyers go under contract. Interest rates are still around the same, but it’s still a good time to buy in Philadelphia and sell in the suburbs. As you may have heard, there are a lot of changes coming to the real estate business including how real estate agents will be paid. As of right now, nothing has changed and it will be business as usual for at least the next couple months. Once more decisions have been made, I will gladly share that information with you. If you have any questions about the lawsuit, or want to discuss anything, do not hesitate to reach out.

What is a Recast?

A general misconception is that a recast is the same as a Refinance. What it means to “recast” a mortgage is to make a large principal payment and have the mortgage payment re-amortized over the life of the mortgage based on the new principal balance – thus resulting in a lower principal and interest payment. Not all mortgage servicers allow recasting, so it is important to ask your Loan Originator if they retain the servicing or sell it after closing.

This is a great way to lower your monthly payments AND lower the total amount you will pay over the life of the loan! Is this something you’d like to know more about, please reach out and I can put you in touch with some of the best lenders out there who will walk you through this process.

Gellman PA Properties
325 Chestnut St. Suite 1300
Philadelphia, PA 19106
267.259.0134
gellmanrealestate@gmail.com