“Is Recasting Your Mortgage the Right Financial Move for You?”
Recasting a loan is a financial strategy that can offer an ideal solution for individuals who have a significant amount of money available to put towards their loan but are uncertain about future income changes. This approach enables borrowers to save on interest expenses without incurring a higher monthly payment. However, it’s important to note that recasting a mortgage does have its downsides. Unlike refinancing, which allows for the possibility of obtaining a lower interest rate or a shorter loan term, recasting does not offer these benefits. If your current interest rate is already low or lower than prevailing rates, much of the advantage of refinancing may be negated. Now let's explore the pros and cons of recasting a mortgage Pros: Lower monthly payment: Recasting a mortgage can result in a reduction of monthly payments, making it more manageable for borrowers. Simpler and cheaper than refinancing: Recasting does not require applying for a new loan, which simplifie...