What is the time frame for a recast being applied?Is PMI automatically dropped when a recast is granted?Can you recast a loan more than once?
Thank you to Ryan Thompson, Athens Classic Mortgage, for providing this information as a resource to our clients. Ryan can be reached at 706-816-1703 and rthompson@athenscm.com
We have helped several buyers navigate the recasting process when they would prefer to purchase a home prior to selling their current home. This allows them to have a more affordable long-term payment once they sell their home. This is good information to have when you are discussing selling and buying with clients who may have aversions to a back-to-back transaction.
Recasting is a mortgage repayment option where a borrower makes a large lump-sum payment toward the principal balance of their loan, and the lender then recalculates (or "recasts") the monthly payments based on the reduced balance while keeping the original loan term and interest rate the same. This results in lower monthly payments without the need to refinance.
Clients selling a home and buying a new one can use proceeds to reduce their new mortgage payment.
Unlike refinancing, recasting is simple and cost-effective. With proper qualifications, recasting can also be a good alternative to a bridge loan.
Clients who didn’t put as much down initially can recast later to lower payments.
Thank you to Ryan Thompson, Athens Classic Mortgage, for providing this information as a resource to our clients. Ryan can be reached at 706-816-1703 and rthompson@athenscm.com
