![]() ![]() By making a $100,000 lump-sum payment to recast your mortgage, you’re freeing up money and increasing your monthly cash-flow. That’s $421 less money every month that you will need to pay towards your mortgage for 30 years. ![]() Using a mortgage payment calculator, we're able to calculate that your monthly mortgage payment will now be $1,265 per month. How much will your monthly payment be reduced to? Your mortgage interest rate and term length stays the same, but your monthly payment will change. Let’s also assume that your lender doesn’t charge a recast fee.īy using your $100,000 inheritance money to recast your mortgage, your new mortgage loan balance is now just $300,000. You have just received a large inheritance, and so you're looking to use $100,000 towards a mortgage recast. Your current principal balance is $400,000, and your monthly mortgage payment is $1,686. Let’s say that you have just gotten a conventional mortgage loan of $400,000, with an interest rate of 3% and a loan term length of 30 years. Let’s take a look at an example of a mortgage recast to see how it works: Example of a Mortgage Recasting Your mortgage lender must approve your mortgage recasting request, and they may charge a recast fee or a servicing fee. In order to recast your mortgage, you’ll need to make a lump-sum payment. Mortgage recasting is also known as re-amortizing since your mortgage’s amortization schedule will be changed. This results in your monthly mortgage payments being smaller. Recasting your mortgage means that your lender will recalculate a new mortgage amortization schedule with a smaller loan balance being spread out over the same time period. More specifically, your mortgage loan will be reamortized based on your new reduced mortgage loan balance for the same loan term length. When you are recasting a loan, you're asking your lender to rearrange your loan. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest.Recasting means to rearrange. There are no guarantees that working with an adviser will yield positive returns. Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). All investing involves risk, including loss of principal. This is not an offer to buy or sell any security or interest. We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors. SmartAsset does not review the ongoing performance of any RIA/IAR, participate in the management of any user’s account by an RIA/IAR or provide advice regarding specific investments. SmartAsset’s services are limited to referring users to third party registered investment advisers and/or investment adviser representatives (“RIA/IARs”) that have elected to participate in our matching platform based on information gathered from users through our online questionnaire. Securities and Exchange Commission as an investment adviser. SmartAsset Advisors, LLC ("SmartAsset"), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. Aside from a small fee (usually around $250 to $500), there are no additional costs to recast a mortgage. No closing costs: Getting a new mortgage can include expensive closing costs, which often dilutes the savings from the lower interest rate. ![]() With a mortgage recast, the process is much quicker since the lender isn’t underwriting a new loan. No lengthy application process: Refinancing can take 30 days or more and requires a lot of paperwork.However, a recast amortized your balance over the remaining term of your current mortgage. ![]()
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |