Down the line you can reduce your monthly payment

Hello House Hunters. Here you are looking for looking for that fabulous new home. And today we’re going to talk about recasts. Now a recast is when you apply at least $10,000 to your mortgage, and if you want your payments to come down, so not just paying it down faster, but you actually want new mortgage payments without doing a refinance.

This is an option that doesn’t get talked about a lot. I’m not really sure why. But I think it’s important for you to know about because this is part of life after once you have a mortgage and the more you know, well, the better educated you are the better. So for a recast, you’re going to need to do a principal reduction of at least $10,000. So this is typically used after you sell another property. Common you’ve got a big hunk of money and you want to pay down the mortgage. Or it can be if you get an inheritance or a large bonus, something of that sort. And you want to take those funds, apply it to the mortgage and not deal with a refi you just want your payment to come down. So you can do a recast typically once per year, and it costs $250.

What you would do is reach out to the servicer, which is where you’re making your mortgage payments, let them know you want to do a recast and they’ll give you instructions on where to send the money. You’ll typically send the money let’s say it’s 10,000 and then separately, you would pay the 250. So that’s really well differentiated and then your new mortgage balance will get spread out over the remaining term and the payment will come down. So when you’re thinking about your options looking forward into homeownership just know that this is this is out there, reach out with any questions.