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Curious how other homeowners look at this decision.
Someone has extra cash available and wants to reduce the monthly mortgage payment, but they already have an interest rate they would rather not give up.
Would they refinance anyway, or ask their servicer about a mortgage recast?
A recast can reduce the required monthly payment while leaving the existing rate and remaining term in place, whereas refinancing replaces the mortgage and can change the rate and terms.
There is also the option of simply putting extra money toward principal without recasting.
The interesting part is that the best choice seems to depend heavily on the existing rate, available cash, fees, remaining loan term, and the homeowner's actual goal.
Dream Home Mortgage put together a detailed comparison covering the differences, costs, eligibility, and tradeoffs:
https://dreamhomemortgage.com/mortga...-vs-refinance/
For homeowners who have faced this decision, which factor mattered most: keeping the existing rate, reducing the required payment, paying the loan off sooner, or keeping the cash available?
Someone has extra cash available and wants to reduce the monthly mortgage payment, but they already have an interest rate they would rather not give up.
Would they refinance anyway, or ask their servicer about a mortgage recast?
A recast can reduce the required monthly payment while leaving the existing rate and remaining term in place, whereas refinancing replaces the mortgage and can change the rate and terms.
There is also the option of simply putting extra money toward principal without recasting.
The interesting part is that the best choice seems to depend heavily on the existing rate, available cash, fees, remaining loan term, and the homeowner's actual goal.
Dream Home Mortgage put together a detailed comparison covering the differences, costs, eligibility, and tradeoffs:
https://dreamhomemortgage.com/mortga...-vs-refinance/
For homeowners who have faced this decision, which factor mattered most: keeping the existing rate, reducing the required payment, paying the loan off sooner, or keeping the cash available?
