Answers (7)
- BobAGare Sr.
- Contributions:1
We are planning on recasting our mortgage. We will finally be selling our old house. We'll take about $75k and recast our mortgage for a lower monthly payment. There were a few calculators on line that would let you figure out your payments after recasting. Now all I can find is recasting calculators to shorten my mortgage.
If any one knows where I can find a calc that will figure out lower payments.
If any one knows where I can find a calc that will figure out lower payments.
- Lew Corcoran, "Lewis Corcoran"
- Contributions:41
If you have a fixed rate mortgage, the answer is no. If you want to make a an extra and large payment towards your mortgage with the goal of reducing your monthly payments, talk to your lender about "recasting" your note. For a small "recast" fee ($150 - $250 or so), the lender will recast your note to reduce the monthly payments over the remaining term of the loan.
Alternatively, you can invest the large sum of cash until such time as the balance of the investment is the same as the balance of the mortgage. At that time, you can then pay off your mortgage.
Alternatively, you can invest the large sum of cash until such time as the balance of the investment is the same as the balance of the mortgage. At that time, you can then pay off your mortgage.
- Mike Bjork, "MortgagePlannerMike"
- Contributions:371
If you have a fixed, amortized payment, then "no" your payment remains the same. If you have an "interest only" loan, then "yes" your payment will reflect the new balance; hence, a new, lower payment. My recommendation will be to place the extra payments into a safe, liquid investment account and allow it to grow. Once it matches your mortgage balance, then consider paying it off with one lump sum. This will provide you with some safety and liquidity. These past few years was a testament to why it's always good to be liquid. If you need it, then it's difficult to pull from the bank. If you're interested in learning more about this concept, then feel free to click here for a free report that a good friend of mine wrote awhile back. He did a wonderful job in writing it, and I was fortunate enough to be allowed as a co-writer on on the report. Enjoy!
- Clay Branch, "Georgia Loans"
- Contributions:8819
If you are going to pay that much down you may benefit from refinancing and paying it down at the same time. What is the current balance, rate, years left, and current principal and interest payment? Also, do you have a fixed rate or arm?
- One Fee Home Loans
- Contributions:18
Question for you: is your loan a fixed rate, or an adjustable rate, loan?
If it's an ARM, a large principal reduction will almost certainly lower your monthly payment when your loan re-casts on adjustment (that is, unless it's a huge upward rate adjustment on a 5/2/5 ARM, Option ARM, or an Interest Only ARM converting to fully amortized).
If it's an ARM, a large principal reduction will almost certainly lower your monthly payment when your loan re-casts on adjustment (that is, unless it's a huge upward rate adjustment on a 5/2/5 ARM, Option ARM, or an Interest Only ARM converting to fully amortized).
- HomeSand.net, "White Picture"
- Contributions:4721
In add to Tiffany's wise advice, it is not change your regular monthly payment, even if you pay large extra payment, it makes shorter your mortgage life however.
If you have the excel program you can use it to calculate the extra payment, if not, you may try the followed link.
http://www.homesand.net/A ... dPay.aspx
If you have the excel program you can use it to calculate the extra payment, if not, you may try the followed link.
http://www.homesand.net/A ... dPay.aspx
- Tiffany Bond, "TiffanyBond"
- Contributions:3150
Generally it shortens the time you must payments and decreases the overall amount of the interest substantially, but you may be able to have the lender recast the loan (or reamortize the loan over the existing years) in the case of a large payment. Either way it should drastically decrease the amount you pay in interest (more, of course, if you are near the beginning of the life of the loan than the end).
If your goal is to reduce interest paid, then a larger payment sooner is more beneficial with compound interest than smaller regular amounts over an extended period.
If your goal is to reduce interest paid, then a larger payment sooner is more beneficial with compound interest than smaller regular amounts over an extended period.
Does my mortgage payment change if I make a LARGE payment?
Or, should I just continue with extra monthly principal payments which I have already been doing?
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