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<p>[QUOTE="Clawcoins, post: 3413565, member: 77814"]on another note swinging back to this topic from before - "recasting" or "reamortizing" a mortgage. I just completed another one and my monthly payment went down by $74.</p><p><br /></p><p>FYI, recast/reamortizing is not a new mortgage. It's using the existing mortgage terms (so your APR & terms don't change) and they recalculate the payments based on previous payments above minimum and add'l principal only payments to reduce the loan $ and ultimately to really pay it off quicker.</p><p><br /></p><p>For example. Let's say your mortgage is $600 a month for 30 years. If you pay the $600 Plus an additional $200 to principal on avg think of how this impacts (a) shortening the actual term of the loan and (b) reducing the future interest payments.</p><p><br /></p><p>In the old days banks used to recast each year for you automatically (at least mine did). Now they require you to ask. If you don't ask even if you make additional payments they do not recalc the (b) monthly interest to be paid and just follow the original calculated schedule. So you end up losing out by paying additional interest on a principal balance that is no longer valid.</p><p><br /></p><p>Fun, eh?</p><p><br /></p><p>So recasting "resets" the payment (principal + interest) term schedule to the current principal amount. Which saves you on your monthly payment and the interest payment. If you don't change your payment amounts you'll also lessen the time to pay it off.</p><p><br /></p><p>So now, my 30 yr loan (6 years into it) is actually more like a 12 yr due to my overpayments and recasting (saving a ton on interest payments) and ultimately, more money for coins or bullion or other real investments.</p><p><br /></p><p>Of course, I'm not lowering my monthly payments as next year I'll recast again (my credit union only allows one to recast once a year). But each year it goes down, my interest payment goes down in relation to the real principal balance.[/QUOTE]</p><p><br /></p>
[QUOTE="Clawcoins, post: 3413565, member: 77814"]on another note swinging back to this topic from before - "recasting" or "reamortizing" a mortgage. I just completed another one and my monthly payment went down by $74. FYI, recast/reamortizing is not a new mortgage. It's using the existing mortgage terms (so your APR & terms don't change) and they recalculate the payments based on previous payments above minimum and add'l principal only payments to reduce the loan $ and ultimately to really pay it off quicker. For example. Let's say your mortgage is $600 a month for 30 years. If you pay the $600 Plus an additional $200 to principal on avg think of how this impacts (a) shortening the actual term of the loan and (b) reducing the future interest payments. In the old days banks used to recast each year for you automatically (at least mine did). Now they require you to ask. If you don't ask even if you make additional payments they do not recalc the (b) monthly interest to be paid and just follow the original calculated schedule. So you end up losing out by paying additional interest on a principal balance that is no longer valid. Fun, eh? So recasting "resets" the payment (principal + interest) term schedule to the current principal amount. Which saves you on your monthly payment and the interest payment. If you don't change your payment amounts you'll also lessen the time to pay it off. So now, my 30 yr loan (6 years into it) is actually more like a 12 yr due to my overpayments and recasting (saving a ton on interest payments) and ultimately, more money for coins or bullion or other real investments. Of course, I'm not lowering my monthly payments as next year I'll recast again (my credit union only allows one to recast once a year). But each year it goes down, my interest payment goes down in relation to the real principal balance.[/QUOTE]
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