From the video
How Does a Mortgage Recast Cut $373 a Month?
What the video covers
Extra money you send the mortgage company can do one of two jobs. Principal only keeps the payment the same and ends the loan early. A recast re-spreads the smaller balance over the payments you have left, so the payment drops and the end date stays put.
On the loan in the video, $380,000 at 6.5% and a $50,000 lump sum at year ten, principal only ends the loan 63 payments early and cuts $103,491 of interest. A recast lowers the payment by $372.79 a month instead. Recast and keep paying the old amount until your paycheck stops, and the loan still ends 44 payments early.
Before you send a dollar, call your servicer and ask: do you offer a recast on my loan, what is the minimum lump sum, what is the fee, and does extra principal I already paid count? FHA, VA and USDA loans cannot be recast; principal only still works on them.
Run your own numbers in the free mortgage payoff calculator →
Get the Debt Freedom Blueprint, free
A plain guide and an Excel workbook that put every debt you carry in one place, with your balances, rates and minimum payments side by side. It is free, and it comes to your inbox.
More from the channel
All the channel's videos and worksheets Mortgage Payoff Calculator
The four questions to answer on your own loan
Can you recast your loan, or is it FHA and cannot be recast at all? When can your PMI come off, and against which value? What will escrow do next year? Should retirement money go near the house at all? The Payoff Planner Pro answers all four on your own numbers.
See the Payoff Planner Pro →One payment of $97. Nothing renews. 30 days to change your mind.