Mortgage Recast
What Is It?
- 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?
Requirements and Details of a Recast
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 USAA
Check your eligibility above.
Submit the recast request form and pay the recast fee, if required in your state.
Make the principal payment.
Sign and return the Recast Agreement.
Note: The Recast Agreement lists your new, lower monthly payment amount.We will re-amortize your mortgage loan accordingly.
You will see your new monthly payment amount reflected in your monthly billing statement, as of the effective date.
Note: The recasting process can take up to 90 days.
