FAQ ( Frequently Asked Questions )

Is a mortgage recast a good idea?

Yes, if you want lower monthly payments without changing your interest rate. It’s ideal if you have a lump sum to reduce your loan balance.

How much does it cost to recast a mortgage?

Costs vary by lender, usually $100–$500. Some require a minimum lump sum payment (e.g., $5,000 or more) to qualify.

Can you recast a jumbo loan?

Yes, some lenders allow jumbo loan recasting, but it depends on their policies. Check with your lender for eligibility and requirements.

Why can’t you recast a VA loan?

VA loans don’t allow recasting because they are backed by the government. However, you can refinance with a VA Streamline Refinance (IRRRL) instead.

How are mortgages calculated?

Mortgages are calculated based on the loan amount, interest rate, and loan term. Lenders use the loan amortization formula to determine your monthly payment, which includes principal and interest. Property taxes and insurance may also be added.

What is a recast amount?

A recast amount is the lump sum payment you make to reduce your loan balance before the lender recalculates your monthly payments based on the new lower balance.

How much does it cost to recast a mortgage?

Recasting usually costs between $100 and $500, depending on the lender. Some lenders also require a minimum lump sum payment, typically $5,000 or more.

What is the difference between mortgage recasting and refinancing?

A mortgage recast lowers your monthly payment by applying a lump sum to your loan principal, keeping the same interest rate and term. Refinancing, on the other hand, replaces your existing loan with a new one, potentially changing the interest rate, term, and monthly payment.

Can I recast my mortgage multiple times?

Yes, but it depends on your lender’s policies. Some allow multiple recasts as long as you meet their minimum lump sum requirements, while others may limit how often you can do it.

How long does it take to process a mortgage recast?

A mortgage recast typically takes a few weeks to complete. The exact timeline depends on the lender, but most process it within 30 days after receiving the lump sum payment.

Does mortgage recasting affect my credit score?

No, mortgage recasting does not impact your credit score because it does not involve a new loan or credit inquiry. Your payment history and loan balance will continue to be reported as usual.

Can I recast my mortgage with an FHA loan?

No, FHA loans do not allow mortgage recasting. If you want lower payments, you may need to refinance into a conventional loan or use an FHA Streamline Refinance.