Mortgage Recast Calculator
Mortgage Recast Calculator: This calculator estimates the new monthly mortgage payment after making a lump sum payment. It’s designed for homeowners who want to reduce their monthly mortgage payment without changing the loan term. The calculator uses the current loan balance, interest rate, and remaining term, along with a lump sum amount, to calculate the updated monthly payment.
How to Use the Mortgage Recast Calculator
To use the Mortgage Recast Calculator, enter your current loan balance, interest rate, remaining loan term, and the lump sum payment amount. Click "Calculate" to see your updated monthly payment. This result helps you understand how a recast can lower your monthly mortgage payments. Use the "Clear" button to reset the fields.
Recast Mortgage Calculator
Mortgage Recast Savings:
| Category | Original | New | Savings |
|---|---|---|---|
| Monthly Payment | |||
| Total Interest Paid | |||
| Payoff Period |
FAQs
1. What is a mortgage recast calculator?
A mortgage recast calculator helps homeowners estimate the new monthly payment after making a lump sum payment, allowing them to understand the financial benefits of recasting their mortgage.
2. How does mortgage recasting work?
Mortgage recasting reduces monthly payments by applying a lump sum to the loan principal, thus lowering the balance and resulting in a lower monthly payment without changing the loan term.
3. Can all mortgages be recast?
Not all mortgages are eligible for recasting; typically, it is available for conventional loans. Check with your lender to see if your mortgage qualifies for recasting.
4. What are the benefits of a mortgage recast?
A mortgage recast can reduce monthly payments without the costs or fees associated with refinancing, allowing more financial flexibility for homeowners.
5. Is recasting the same as refinancing?
No, recasting differs from refinancing as it doesn't change the interest rate or loan term; it simply reduces the monthly payment by applying a lump sum to the balance.
6. How much can I save by recasting my mortgage?
The savings depend on the lump sum amount, interest rate, and remaining loan term. A recast calculator can help you estimate potential savings in monthly payments.
7. Are there fees for recasting a mortgage?
Most lenders charge a small fee for recasting, usually between $100 and $500. Check with your lender for specific fees related to your mortgage.
8. How much should my lump sum be for a mortgage recast?
The amount can vary, but most lenders require a minimum of $5,000 or more. Larger lump sums will have a greater impact on monthly payments.
9. Does a mortgage recast affect my credit?
Recasting typically has no impact on credit scores, as it doesn't involve a new loan or affect credit utilization like refinancing might.
10. Can I recast my mortgage multiple times?
Yes, you can recast multiple times if your lender allows it, though some lenders have limitations on how often you can recast.