Should I recast my mortgage?
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- čas přidán 7. 03. 2021
- In this video, I talk about what mortgage recast as per the request of a subscriber. You can recast your mortgage loan with most lenders/servicers for a small fee. If you have questions about mortgage and want me to make a video, please feel free to request. I enjoy making videos and if enough people are curious, I will make a video on anything mortgage/ real estate related. Cheers!
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I did this. took $480 off my monthly payment. I kept paying the original payment. Saves a ton in interest too. Just payed it off this past March 10th. No more M&T in my life;-) It only took 2 weeks to recast my loan. It DOESNT take that long.
You only saved interest because you made an extra principal payment by paying the original amount. Same thing would have happened if you didn't recast it.
@@todd2456 wrong...but ok
@@todd2456 Recasting drops your monthly payment and allows you to save interest because of the accelerated payoff.
I'm working toward a similar plan.
@@ltgemini1599 recasting doesn't change the interest rate or the loan term. Do a simple Google search. DUH
I’m with wells Fargo. They require a minimum of $20,000 down for a recast mortgage
Wells Fargo… that’s the problem… just kidding… kind of
I’ve been paying a lot extra every month on my 10 year mortgage that I refinanced 1 1/2 years ago at 2.125%. I’ve paid an extra $33k and owe about 104k still. My goal was to pay off the mortgage early. Now that rates are going up I have the option to recast and save about $350 a month that I could invest in something with much higher interest. I’m leaning towards recasting.
Recast that bad boy and pay off that 2.125% debt slowly is my advice. Vs Inflation that loan is pure gold
How often I can recast? Because as I know it is only once over the life of the loan
A listener asked about MORTGAGE RECAST specifically so I made this video. If you have any questions you would like me to answer feel free to post the topics below!
WoW… my loan did not mention this to us.
This makes sense to me vs. the long letter I received from the bank.
Cool, I like to keep it simple
Great vid . If refinance before fixt term ends do the charges for ending fixed term apply
This was easy to understand. Thank you
You are welcome! Thanks for watching!
Decent video, but wish you talked about whether it makes a difference in the amount of interest you pay. I don't think it makes a difference, but would have been good to cover.
good feedback. If I update this video (i do with many) I will certainly add that.
That makes great sense. Thank you
Thanks for watching
Great video, thanks Matt!
No problem 🤙🏼
Perfectly explained
Glad you liked it
I have a two family how thinking about recasting the home in the future because base on the mortgage 💸 I paying I still have to get money out my pocket two pay it I want to make it some that the home fully pay it self off the rent I get from the tenant.
I have a below 3% interest on the mortgage and considering recasting since I am not confident the market this year will return higher than 3% on what is left over in my investments. Before they evaporate....does it make sense to you Matt?
4:46 please explain why you wouldn’t do that. If your mortgage payment is higher than you’d like and you can’t refinance to a lower payment without adding more years to your loan, then why wouldn’t you recast? Obviously, recasting isn’t worth it just to reduce your monthly payment by $50. That leads me to my next question. How much reduction either in dollars or percentage does recasting become worthwhile?
Will recasting get rid of pmi??
Can you please explained which type of mortgage loans it only applies too. Not VA or FHA loans
Oh yeah, Just conventional ...
Forgot to mention that.
Video's core content starts at 1:14.
Thank you for the clarification re: recasting
No problem!!
With everyone getting locked into sub 3% fixed late loans, is recasting basically their best form of 'refinancing?'
in some cases. recast requires large principle payment though. not all people have that
I've been making double-triple payments when I can, and have always paid extra. I'm only 10 years into my 30 year loan, but owe less than 20% of my original principle. If I were making minimum payments, I'd be in the middle of year 27 before I had this remaining balance.
Does it make sense to recast now, but continue to make my current large payments with hopes of paying it off even faster?
In other words, would a larger portion of each payment go to principle after recast, or would the same amount go to tax and insurance each month with everything else going to principle, they just expect less principle each month?
I'm pretty sure it's the latter and it wouldn't make sense for someone like me, but wanted to verify.
You’re spot on, for your scenario it wouldn’t make sense. It only would make sense if you needed the flexibility of the lower payment (if you planned to retire or got decrease in pay or something)
HI there nice video, have a question. I have a 20yr mortgage @2.5%, 135K balance, I already prepaid principal $15k, recently had a nice bonus/ inheritance and wanted to throw about $50k more at it, then recast. I like the flexibility of having lower payment, but would likely keep making same payment to pay off faster, I could pay off the full Bal now, but prefer a hybrid approach of doing this and also investing other places for higher returns. I plan on calling servicer tomorrow to see how much recast fee is. Wondering your thought on my plan? or should I just pay it off and be done? Appreciate any advice. thank you
Recast should be $150-$250, so relatively inexpensive. I like your plan of having lower payment and investing elsewhere. That 2.5% rate is an asset, especially considering you can get 4%+ on a money market account!
@@MattTheMortgageGuy Called my servicer this am, told me Recast fee is $500. I thought that was high, told them if I paid off mortgage they wouldn't get anymore interest from me, they said that was my choice. Said they raised the fee this year from $300 to $500. Now im considering paying it off due to spite. I am getting 4.35% return on my money in high yield savings, however this is taxed as ordinary income. I am having a hard time sending out $135k to pay this off when its a large chunk of my savings, but not having a mortgage again and the increased cash flow and Peace of mind is valuable. If the fee was $150 I might have gone for the recast, or maybe $500 isnt that big of a deal. Having a hard time deciding what is the best move for me.
Why after sending about 900,000.00 for the recast and also sending the recast fee, the servicer sold otransfer the recast to another investor? And the other investor is charging me more money and taking extra time? Thanks for answering.
They probably sold it because your balance was lowered.a lot.ie...they were not going to make much off of your remaining balance. The new investor is going to try and make as much as they can off of the loan. Still sounds shady though. If you already paid for the recast why an extra charge??? The lenders dont make anything off of a recast which is s=why they want you to refy instead and dont tell you about recasting. It was the best thing i ever did with my mortgage...which is now payed in full;-)
After you put down the lump sum to reduce the principal and they do a recalculation of that reduced principal...does that mean you start off paying mostly interest in the early payments again? For example, what if you are 5 or more years into a 20 year loan (of $200K) @ 2.75% and you're thinking to put down a lump sum of $30k to reduce the current principal by doing a recast. Yes/No?
yes, it reduces your payment and in so will reduce the amount going to principle by recalibrating the amortization
it doesnt. i did this. you're already paying less interest because of the 30000 down. it doesnt start the loan over like a refy....so the interest payment is still the % it would be with the 30000 taken off of the principal. the principal/interest ratio is still the same for that balance. Its not like starting over at the beginning of a new or refinanced loan. With the new payment after the recast...both the principal and interest are less BUT are still the same percentage for the new lower balance. Youre NOT going to pay more interest.
I went from 1280 to 620 mortgage payment after a recast in 2020. You tell me.
But you’ll have to pay capital gains if you don’t level up your home.
Does the interest stay the same or it will lower it? Have a blessed day
it stays the same
The interest rate stays the same but the interest payment goes down because you are paying down the principle quicker.
Hi I put 100K toward my mortgage beginning January, according to the mortgage co the recast will be effective in March, is this normal?
Yep, it generally takes 45-60 days to put that in place
I didn't recast my home but I'm getting a loan recast fee of $500 am I getting screwed.
That doesn't sound right. Where is that fee showing up?
I think the minimum is 10% of what you owe
i think its much lower. likely different rules from different lenders as well
Here’s my situation…..
My tenant pays $850/mo, my payment(escrow included) is $650/mo. I owe $48k with a 5.5% With 15yrs left
What would u do?
Pay $1000/mo ($350 extra towards principle) and have it paid off in half the time ..🤙🏼
Does it cost anything to recast?
yeah, I've heard between $150-$500 depending on the lender
Bla bla bla 1:16 . You are welcome!
Good call! Skip to 1:16 to hear the meat and potatoes and not my bla bla bla.👍
I am new to the channel and appreciatedthe intro 😎