What is a recast?
- A mortgage recast is a feature where the remaining payments are recalculated based on a new amortization schedule. During a mortgage recasting, an individual pays a large sum (over $5,000) toward their principal, and their mortgage is then recalculated based on the new balance.
What types of loans are NOT eligible for a recast?
The following loan products are not eligible for a recast:
- Federal Housing Administration (FHA) Loans
- Veterans Affairs (VA) Loans
- Government National Mortgage Association (GNMA) Loans
- Bond Loans
- Jumbo Loans
- Portfolio Loans originated on or before 7/24/18
What are the requirements for a recast?
- The loan must be paid current.
- The recast process cannot commence within 60 days from the date the loan closes.
- The recast process can only be performed once in a 12 month period.*
- A principal reduction payment of $5,000 or more is required.
- The recast process must be requested within 60 days of the principal reduction payment.
- The first monthly payment following the principal reduction payment must be made at the regularly scheduled amount; thereafter, the reduced principal and interest payment amount will be due.
- A form or application is not required to begin the recast process; however, the signed recast agreement must be received prior to executing the recast.
- A program processing fee must be paid in the amount of $250, where applicable**.
- Portfolio loans originated after 7/24/18 are limited to one recast during the life of the loan.
** A recast fee is not applicable in all states.
What is the process for obtaining a Recast?
- Contact your lenders Customer Service to request the mortgage recast.
- Make a principal only payment in the amount of $5000 or greater.
- Return signed agreement to Caliber. The signed agreement must be returned via regular mail before the due date on the agreement.
- The recast fee must be paid prior to the execution of the recast.
- Once both the signed agreement and recast fee received, the new principal and interest payment will be finalized. A billing statement with the new payment and a copy of the agreement will be mailed to you for your records.