Mortgage Recast

Written By Sean Mertens
Fishing rod casting into the ocean.

What Is a Mortgage Recast?

A mortgage recast is when you make a large, lump-sum payment toward your loan principal and then ask your lender to recalculate your monthly payments based on the lower balance. There are minimum lump-sum payments that are required to enable a recast.

Pros:

  • Usually no credit check or income documentation required.

  • Lower fees (often just a few hundred dollars).

  • Keeps your same loan terms (rate, maturity date).

Cons:

  • Requires a large lump-sum payment.

  • Not all loan types or lenders allow recasting.

Loan Types That Usually Allow for a Recast

  • Conventional loans (Fannie Mae / Freddie Mac)

  • Jumbo loans

Loan Types That Usually Do Not Allow for a Recast

  • FHA loans

  • VA loans

  • USDA loans

Refinance Instead

Before you recast, you should explore your refinance options. There are many more benefits to a refinance in addition to the benefits of a recast. Refinancing can reduce your interest rate, get rid of mortgage insurance, pay your mortgage off sooner, and much more.

Sean Mertens
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