Mortgage Recast

What Is It?

Recasting a mortgage happens when you put down a lump-sum payment toward the principal balance and the lender re-amortizes the loan.

  • Since you are paying down your principal by a large amount, your monthly payment will be lowered, but your interest rate and loan terms will remain the same.
  • You will pay less total interest on your loan due to the lowered principal balance. Alternatively, you would pay even less interest if you paid down the principal amount without recasting and just pay the loan off early.

How Do I Recast My Loan?

Not everyone is eligible for a Recast. If you are, you will need to submit a recast request form prior to making the lump-sum payment. Making the payment does not guarantee approval of the recast request. Once approved, a Recast Agreement will be created that allows the loan to be re-amortized, based on the lump-sum payment amount.

Submit a Recast Request Check Your Eligibility

Requirements and Details of a Recast

If you are eligible, here are some details to keep in mind:

  • Minimum Amount – Mr. Cooper requires a minimum principal payment of $10,000.

  • Recasting Fees – There is usually a non-refundable fee of up to $250 to recast your mortgage.

  • Mortgage Term – The term (length) of your mortgage remains the same.

    Example If you recast 10 years into a 30-year mortgage, you will still have 20 years left on your term.

  • Investor Restrictions – Currently, GNMA-backed loans are not eligible for recast.

  • Loan Type – Interest-only, Option ARMs, and commercial loans are also not eligible.

  • Credit Worthiness – There are no credit checks or requirements for mortgage recasts.

  • Interest Rate – Your interest rate stays the same, which could be a benefit over refinancing if you’ve already locked in a low rate—or a negative if your rate is particularly high for the current market.

Recast Process at Mr. Cooper

  1. Check your eligibility above.

  2. Submit the recast request form and pay the recast fee, if required in your state.

  3. Make the principal payment.

  4. Sign and return the Recast Agreement.

    Note: The Recast Agreement lists your new, lower monthly payment amount.

  5. We will re-amortize your mortgage loan accordingly.

  6. You will see your new monthly payment amount reflected in your monthly billing statement, as of the effective date.

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