Recast, Everything You Need to Know!

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?

  1. Contact your lenders Customer Service to request the mortgage recast.
  2. Make a principal only payment in the amount of $5000 or greater.
  3. Return signed agreement to Caliber. The signed agreement must be returned via regular mail before the due date on the agreement.
  4. The recast fee must be paid prior to the execution of the recast.
  5. 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.

Contact me with any questions, concerns or ideas. No Question is to small!

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