This is great Julee I am sharing with my buyers. Thanks so much!

@workshopmortgage

4 ай бұрын

You're ever so welcome Isadora! If you or your clients have any questions, don't hesitate to reach out. You can reach me at 503-799-3711 or juleef@rate.com. 😁

Great info! Thanks

@workshopmortgage

5 ай бұрын

Glad it was helpful, Diana! You're welcome! 😊

I’ve read recasting restarts front loaded interest thereby costing more interest paid overall. If we recasted but continue to make the original payment amount each month does that counteract the newly front loaded interest?

@workshopmortgage

27 күн бұрын

Hi there! Mortgages are what's called "simple interest" loans, which is to say you pay interest based on the amount you owe. I often hear people say that mortgage interest is "front-loaded" but that's not exactly true. You pay more interest at the beginning of a loan, but that's just because you owe more. Every month your interest due equals: LOAN AMOUNT x INTEREST RATE / 12 When you pay your loan down with a chunk of extra money, you reduce the loan amount, so your interest cost immediately drops. If you DON'T recast when you pay a chunk toward your loan, you'll be required to keep paying the payment based on your original loan amount. That payment will include more principal and less interest, so you'll be on track to pay your loan off sooner. If you recast, your minimum payment will be refigured to reflect the lower loan balance over whatever the remaining loan term is. If you chose to pay that lower payment, you are now paying less toward your principal every month, which slows the rate at which you're paying your loan down, which means you'll pay less than you were originally scheduled to pay (had you not paid the loan down), but more than if you paid the loan down and didn't recast. But that's not BECAUSE OF the recast... if you recast (so yo have the option to pay a lower payment), but you ignore the lower amount on your monthly statement and just keep paying your old bigger payment (the payment from before you recast), you'll pay (to the penny) the same amount of interest as if you'd not recast. Nutshell: Your interest cost is a function of the amount you owe and how fast you pay down what you owe. Hope that makes sense!

Is it possible to recast to get a different interest rate? How long does it take to recast?

@workshopmortgage

Жыл бұрын

Hi William! A recast doesn't change the interest rate. To change the rate, you need to refinance. The process is generally pretty quick... 30 to 60 days.

Hi! What are the cons at recasting? When I did my research it almost sounds too good to be true. Does the lump some money you put down for the forecast go to any insurance that you might pay and that is why your payment is lower or is all of this money going down to principal?

@workshopmortgage

3 ай бұрын

Personally I don't see a downside, as having a lower minimum payment simply gives you flexibility. But if your goal is to pay your loan off quicker and/or if you want to pay less interest, recasting your loan as you pay a chunk toward the principal and then paying the new, lower minimum payment will keep your loan on track to be paid off at the date originally scheduled. If you don't recast when you pay a chunk toward principal, your payment will remain the same, which will pay your loan off faster with less interest. The other option, however, would be to recast (so you secure the option to pay a lower payment) but then continue paying the original payment. That way you get the best of both worlds... you're tracking to pay your loan off faster, with less interest due to paying the higher payment, but if anything in your life changes that would make a lower payment helpful (temporarily or permanently), you'll have that option.

How often I can recast in a year? Because I read, it is only once over the live of the loan

@workshopmortgage

4 ай бұрын

Hi there! It's entirely up to your loan servicer. I would suggest contacting them and asking. It's not unusual for the policy to be once during the term of the loan... but your servicer may be more generous than that!

I am considering making a lump sum payment and recasting my mortgage. I have been listening to many youtube videos to learn about it. I recently found 1 of those mortgage recast calculators. I put all my information in and it calculated my new principal balance, my new monthly payment and my new term - which was 10 years less than my original term. From what I have learned about recasting the term should remain the same - Is this recast calculator correct / accurate? Do you have a mortgage recast calculator link to share? Thank you!

@workshopmortgage

6 ай бұрын

Hi @paulgrice5013! Your loan term definitely shouldn't decrease when you recast. I haven't ever seen a recast calculator online that was set up to do the figuring you are seeking. But I've never gone looking for one. This also isn't something for which I've made a spreadsheet, mostly because I'm never more than arm's length away from an amortizing calculator, and this is a quick and easy calculation to run with just a few bits of information. I'd be happy to do the figuring for you. Please email me the following info to me at juleef@rate.com The date of your first mortgage payment on your home loan. (If you're not sure, just tell me your closing date for the loan.) Your original principal balance. Your current principal balance. Your interest rate. Your current principal and interest payment (not including any escrows for taxes or insurance). The amount you plan to pay down against the loan. I'll calculate your new payment and email you a new amortization schedule. 😁

@paulgrice5013

6 ай бұрын

thank you@@workshopmortgage

@workshopmortgage

6 ай бұрын

@@paulgrice5013 You're welcome! I'll keep an eye out for your email!