1. What Is Mortgage Recast?

A mortgage recast is when you make a large principal payment and your lender recalculates your monthly payment based on the new, lower balance while keeping the original loan term and interest rate unchanged.

2. How Does The Calculator Work?

The calculator uses the mortgage recast formula:

Where:

• \( Reduced\ Principal \) — The remaining principal balance after a large payment ($)
• \( Term \) — Remaining loan term in months

Explanation: This formula calculates your new monthly payment by dividing the reduced principal balance by the remaining number of months in your loan term.

3. Importance Of Mortgage Recast

Details: Mortgage recasting can significantly lower your monthly payments without refinancing, saving you money on interest over the life of the loan while maintaining your original loan terms.

4. Using The Calculator

Tips: Enter the reduced principal amount in dollars and the remaining term in months. Both values must be positive numbers to calculate your new monthly payment.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between recasting and refinancing?
A: Recasting keeps your original interest rate and term while lowering your payment. Refinancing replaces your existing loan with a new one, potentially changing both rate and term.

Q2: Does Wells Fargo charge a fee for mortgage recasting?
A: Wells Fargo typically charges a processing fee for recasting, usually around $200-$250, though policies may vary.

Q3: How much principal payment is required for a recast?
A: Most lenders require a minimum principal payment, often $5,000-$10,000, though Wells Fargo's specific requirements may vary.

Q4: Can I recast my mortgage multiple times?
A: Policies vary by lender, but many including Wells Fargo allow only one recast during the life of the loan.

Q5: Does recasting affect my credit score?
A: No, recasting doesn't require a credit check and doesn't affect your credit score since you're not applying for new credit.