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Have you ever heard of the term “recasting” when it comes to your mortgage? Not sure what it is? Loan Officer Chelsea Stanton breaks it down for us.

“When people think of “recasting” they often think of fishing. But, nope I’m not talking about your relaxing day on the water fishing, when you reel in your line and have to send it back because you didn’t catch anything. This recast is more for after you’ve caught the ‘big fish’, and by ‘big fish’ I mean your new home!”

Have you closed on a new primary residence while waiting for your current primary home to close and have funds from the sale of your home, or for other funds to be liquidated? If so, you may be eligible for a re-cast! Essentially a recast allows you to use these new funds to pay down the principal balance of your new home loan, lowering your monthly principal and interest payment and potentially removing your monthly mortgage insurance if you did not put 20% down to start with. 

Terms typically included in a recast

• Only Conventional Fannie Mae and Freddie Mac loans are eligible. (FHA, USDA, and VA* Government loans are not eligible)
• You must submit a written request for the recast to your servicer. There may be a waiting period prior to eligibility review and processing.
• Minimum payment to reduce the principal to reduce the current mortgage balance is required. Most often this is a minimum of $10,000 or 10% of the unpaid principal balance, but varies by loan servicer. There is typically a recast fee associated so check with your servicer to see what they require.
• There can be no prior loan modifications on the mortgage.
• Loans cannot be part of an active bankruptcy or be delinquent on monthly payment
• Eligibility for recast varies by servicer

So if you caught the big one or are out there fishing for it but know you’ll have more funds soon a recast might be a great option for you! Happy Fishing!

Ready to discuss recasting your mortgage? Reach out to our team today.

*Note: This information is offered for informational purposes only. Not all investors and servicers offer recasting, and not all borrowers are eligible for recast. PMI removal assessment is a separate request and process. Please inquire with your servicer about whether recasting is offered, as well as other terms and conditions that may apply. A recast requires a formal written request and is a formal loan modification lowering the monthly principal and interest payment. There is a servicer processing fee.