The critical point is that you understand what recasting is! From this example you can get a good idea of the savings difference between a mortgage recast and what would happen if your mortgage lender would reduce your principal while keeping the same amortization schedule (Optimal terms). Recasting a loan typically costs between $250 and $500. Plus, the calculator will also allow you to view and print out the revised amortization schedule. And, finally, it costs money since the lender charges a fee for you to do it. Mortgage recasting is a little known but useful trick that allows you to pay down your mortgage balance and secure a lower monthly payment while keeping your original loan and rate. Now, I don't know the exact wording of the fine print included in the mortgage papers these borrowers have signed, but I can only assume the fine print read something like this: If that's true, does it sound like the mortgage lender genuinely cares about their customers? So if you are on a desktop, you may find the calculator to be more user-friendly and less cluttered without them. Ever wondered how to calculate your new mortgage payment after a recast? And don't worry. Enter the principal and interest portion of your monthly mortgage payment. You can make all the extra payments you want, but it won't reduce the interest cost or the length of the payoff because we (the mortgage lender) secretly sold your mortgage to an investor for a lump sum of money, so we will simply put your extra and overpayments into escrow and then apply them to the loan at the end of the payment term. Select Stick or Unstick to stick or unstick the help and tools panel. If the calculator didn't work at all, please try downloading the latest version of Google Chrome or Firefox. While I do research each calculator's subject prior to creating and upgrading them, because I don't work in those fields on a regular basis, I eventually forget what I learned during my research. Third, it doesn’t change the term of your mortgage. "Mortgage recasting is a much simpler process than refinancing," says Yates. If it's not filled in, please enter the web address of the calculator as displayed in the location field at the top of the browser window (www.free-online-calculator-use.com/____.html). Based on your entries, this is how much you will still owe (principal balance) on your home loan after deducting the lump sum recasting payment. tab for Help & Tools instructions. All calculators have been tested to work with the latest Chrome, Firefox, and Safari web browsers (all are free to download). Please give the calculator a letter grade. Although there are plenty of scenarios where recasting makes sense, there are some clear disadvantages as well. You keep your original loan, your original term, and your original interest rate. In the above example, making a lump-sum principal reduction while continuing to make the original payment amount would save $3,585 more in interest charges than recasting, and you would pay off your mortgage 15 months sooner. Enter the mortgage's annual interest rate. You must be able to pay a recasting fee. It’s not a lot of money, but with the rental barely making money, the $10,000 recast allowed him to be able to afford and keep the home. Next enter the annual interest rate and monthly payment amount, and then click the "Calculate Principal" button. With a 30-year, fixed-rate mortgage with a $400,000 principal amount and 4.5% interest rate you would pay a $2,027 monthly payment. You will also be required to make an additional lump-sum payment and pay a small fee to recast. First of all, you are putting a lot of cash into the equity of your home, which is probably a good investment but it isn’t guaranteed, either. Close. If no data record is selected, or you have no entries stored for this calculator, the line will display "None". Naturally, it’s preferable to have lower monthly bills as a retiree on a fixed income, and housing is usually a big line item. You may use my email to send me "What's New" monthly update. For recasting to work, lenders require an additional lump sum payment to reduce your balance. These home mortgage calculators can be used to calculate house purchases, closing costs, principal and interest payments, private mortgage insurance (PMI), refinancing, mortgage term, and rate comparisons, and affordability. Click the ? Other Cool Stuff: VA Home Loan Secrets. Of course, since your monthly mortgage payment is reduced while everything else stays the same, this does result in interest savings. If it's not filled in, please enter the title of the calculator as listed at the top of the page. For example, if youre 6 years into a 30-year mortgage, once you recast your loan, you will still have 24 years remaining to pay it off. Your lender may also offer recasting but I cannot list them all here…. Recasting isn’t always going to be the best solution to meet your mortgage goals. This mortgage payment calculator gives you an estimate. I’ve linked to the most helpful articles I could find for the three main lenders before, but you will probably have to do your own research as the banks don’t make it easy to find. Instead of paying extra on your mortgage each month, you make one larger lump sum payment against the principal balance and ask your lender to reset the monthly payments. If this is an existing mortgage the Mortgage Recast Calculator will assume that a payment has not been made for the current month, so the current month will be used as the start of the amortization schedule. Find the right formula for financial success. EMA Refinance Worksheet Calculator But, it assumes a few things about you. Finally took the plunge and cashed out some investments (not retirement) to chuck toward the mortgage. Posted by 1 year ago. Otherwise move the switch to the "No" position. On the other hand, if you have a fully-funded emergency fund, no higher interest debt, and your lender won't credit principal prepayments as they are made, then recasting your mortgage might be a good idea -- especially in cases where refinancing is either not an option or doesn't offer any significant savings. Take a sneak peek at the Ad-Free Design being enjoyed by hundreds of members for less than 25¢ a week. Estimate your monthly payments with PMI, taxes, homeowner's insurance, HOA fees, current loan rates & more. If this number is substantially different from the actual number, please check to make sure you entered the correct current payoff amount and/or interest rate. A mortgage recast and refinance are often confused with one another, and even discussed interchangeably. More information The Mortgage Recast Calculator on this page will instantly calculate your savings from recasting a home loan. Mortgage recasting is a lesser-known way to manage your mortgage. But if you want smaller monthly payments, a recast mortgage could be right for you. And, you can always sit tight and invest your money elsewhere! Note that any recast fee you entered will be multiplied by the total number of recasts. It isn’t quite as clear cut as refinancing, because the choice you need to make is if the additional principal that you are paying toward the mortgage could be invested more productively elsewhere. To calculate the current principal balance, enter the next and final payment month and year OR the number of payments remaining.