How to Recast Your Mortgage (Step-by-Step)

You've decided a mortgage recast makes sense. Now what?

The process is simple — way simpler than refinancing — but there are a few things you need to know before you call your lender.

I'm Bill McCoy, a California mortgage broker (CA DRE #01212512). Here's the step-by-step.

New to recasting? Read what a mortgage recast is and how it works first.

Step-by-Step: How to Recast

1. Call Your Lender

Ask: "Do you allow mortgage recasts? What are the requirements and fees?"

Questions to ask:

• What's the minimum lump-sum payment? (Usually $5,000-$10,000)
• What's the recast fee? (Usually $150-$500)
• How long does it take?
• Do I need to fill out a form?

2. Submit Your Lump-Sum Payment

Wire or send a check to your lender. Include a note: "Apply to principal balance for mortgage recast."

This is important — without that note, they might just apply it as a regular extra payment, and your monthly amount won't change.

3. Pay the Recast Fee

Your lender will invoice you. Expect $150-$500. Compare that to $4,000-$10,000+ for refinance closing costs.

4. Wait for Your New Payment

The lender recalculates your payment based on the lower balance, same rate, same remaining term. They'll send a new payment coupon or update your online account.

Timeline: 30-60 days from payment to new lower payment.

Which Loans Can Be Recast?

Not every loan qualifies.

Eligible:

• Conventional loans (Fannie Mae and Freddie Mac) — yes, almost always
• Some jumbo loans — check with your lender

Not eligible:

• FHA loans — no
• VA loans — no
• USDA loans — no
• Some portfolio loans — varies by lender

If you've got a government-backed loan, you'll need to refinance instead.

Which Lenders Allow Recasting?

Most major conventional servicers do:

• Wells Fargo
• Chase
• Bank of America
• Rocket Mortgage
• Most credit unions

Always confirm with your specific servicer. Policies can change.

Recast vs. Just Paying Extra Principal

You've got $50,000. Here are your two options:

Option A: Recast

• Pay $50K toward principal + $300 fee
• Your required payment drops by ~$239/month
• You've got flexibility — pay extra if you want, but your minimum is lower

Option B: Just Pay Extra Principal (No Recast)

• Pay $50K toward principal
• Your required payment stays the same
• You'll pay off the loan ~4-5 years early

Which is better? Depends on your goal.

Pick recast if you want lower monthly expenses and cash flow flexibility. Pick extra principal if you're focused on paying off the mortgage as fast as possible.

Broker's Tip: You can do both. Recast to lower your required payment, then keep paying the old higher amount voluntarily. You'll pay off the loan early AND have flexibility if money gets tight.

Frequently Asked Questions

Can I recast more than once?
Yes, but most lenders limit it to once every 12 months.

Does recasting affect my credit?
No. There's no credit check and no new loan. Your credit score is unaffected.

Can I recast if I have a HELOC or second mortgage?
Yes, but only the first mortgage gets recast. Your HELOC stays separate.

What about PMI?
Recasting doesn't automatically remove PMI. You'll need to request PMI removal separately once you hit 80% LTV. The lump-sum payment helps you get there faster though.

Can I sell or refinance after recasting?
Yes, anytime. Recasting doesn't lock you into anything.

Any tax implications?
None. You're just paying down principal. Your mortgage interest deduction decreases slightly (lower balance = less interest), but that'd happen with any extra payment. Talk to your CPA if you've got specific questions.

Not Sure If You Should Recast or Refinance?

The right move depends on your rate, balance, and goals. I'll look at your numbers and tell you what saves the most.

Get Your Free Quote

Read next: Recast vs. Refinance — Which Saves You More?

Better Offers Inc | CA DRE #01212512