Reply to Mortgage recast vs extra payments

Forum Index » Money and Finances

Reply to "Mortgage recast vs extra payments"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Here’s what I would do. Take half of your inheritance and pay down the mortgage. Do not recast your mortgage, but keep the same monthly payments as before. Invest/save the rest based on your risk tolerance. Depending on when you retire, your mortgage will be very low because of all the extra payments. (There are online calculators that you can find.) At that time, you can choose to recast.

Best of luck![/quote]

You don’t get recasting.  If you pay a lump sum or even extra monthly you want to recast.  It saved us a lot of money. You can recast multiple times.  We did it twice.  [/quote]
Actually, it costs you money, it doesn't save money.  When you recast, you will have paid more in interest by the time you will have paid the mortgage back compared to if you didn't recast.

Perhaps you meant that you had lower monthly payments, but it wasn't savings.  By recasting your mortgage, you essentially took out a loan to get the monthly "savings."
[/quote]He /she recasted twice, so I'm pretty sure they know what they did.  You can go to an online mortgage recast calculator and see the results and the benefits to the participant.  You put down a sizable lump sum, and your loan gets reamortized.  So with less principal due your monthly payment decrease and the total  interest paid at completion of the loan will decrease.  So you do end up saving money on interest paid.  The term of the loan is not changed, as when you make extra payments the loan will get paid off faster.

I'm retired and live in NOVA with increasing property taxes each year.  If and when in the next few years,  a few stock positions blossom, I may prune stocks(cyclical stocks)  and apply some of that money into a recasting.  Something I'm considering for cash flow purposes.  I have no intention in paying off my 3.25% now 27 yr loan early.  Each case is specific to that person's circumstances.  And the math doesn't lie, financial institutions are underwater on all those low mortgages.  [/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics