Reply to Trying to pay more on house over time to decrease interest

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]You pay into principal extra each month.  Make sure it gets designated for principal.  Then if your bank allows recast.  We saved a lot of money that way.  We did two recasts.[/quote]

Recasting doesn’t change the total interest you pay. It is always calculated on the actual outstanding principal, it doesn’t remain static. [/quote]Are you sure?  The interest rate and term stay the same. But you have made an additional  payment on the principal.   So the outstanding balance is less, thus lower interest payments.   That is whole purpose of recasting a loan, otherwise why would anyone do it??[/quote]

You pay a lower amount of interest.  If your original mortgage was for $500K and you have paid it down to $250K, recasting rests your mortgage to the same terms but you are paying the interest on the $250K instead of the $500K which lowers your payment.  When our payment got lower, we'd pay the same amount adding the extra to principal again.[/quote]

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