How does recasting a mortgage work?

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How does recasting a mortgage work?

Question: So, I got my original mortgage at Chase. That was 580,000,…

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Question:

So, I got my original mortgage at Chase. That was 580,000, 30-year fixed, 3.875% interest rate. Currently, the loan amount is down to $550,000. I’m planning to buy another house in two years, but I’m weighing my options and wondering can I recast my current mortgage with Chase? How does recasting work?

Answer:

Recasting occurs when you’ve made large principal payments towards your balance, and now you want the amortization schedule to be recast, so your payments are lower. Not all banks or programs offer recasting, so you’ll want to check with your current mortgage company to see what their requirements are. Some require a minimum lump sum payment like 5,000. Others might be a percentage of your current balance, like 10% of the mortgage amount.

PS Check out our simple eval process where you can choose whether you want to: get real rates specific for your scenario (beware of teaser rates!), see how much home you can afford, get pre-approved, or quickly submit your contact info so we can get back in touch.