How to recast a mortgage
Contact your servicer before paying, follow its instructions for the lump sum, and sign the recast agreement.
01 How to recast a mortgage in five steps
- Look on page 1 of your Closing Disclosure to find the loan type. Recasting is not available for FHA, VA and USDA loans.
- Call the servicer and request a recast, and do this before you pay. Find out the fee, the smallest lump sum they accept, and how they want you to send the funds.
- Pay the lump sum toward principal only by wire or certified funds. Include the fee if they collect it up front.
- Sign the recast agreement that the servicer sends you. Bank of America mails a single agreement that all borrowers sign.
- Review your next statement for the same rate and end date, along with a smaller payment.
02 What to say to your servicer
"Hello, I am calling about this loan: [your loan number]. I want to make a principal curtailment of [amount], then have the loan recast afterward. Could you tell me whether the loan qualifies, how much the recast fee is, what the minimum amount is, and how I should send the funds for principal only?"
03 Recast request letter
loan number [number], [property address], [Your name]
I request the re-amortization (recast) of the loan above, following a principal-only payment of [amount] made by [wire or certified check] on [date]. Please apply the funds to principal, recalculate the monthly payment across the remaining term using the current note rate, and send me the recast agreement to sign. Before you process the request, please confirm any fee in writing.
[Signature of each borrower]
04 Recast questions
Does the lump sum go out before I make my recast request?
Make the request first. Servbank asks for its $500 fee before completing the recast; Bank of America wants the request first, with the funds within 30 days.
How long will the recast process take?
It normally takes one or two billing cycles. With Bank of America, the new payment begins the next month if funds arrive by the 15th. If they arrive after that, it begins two months later.
What are the mortgage recast requirements?
The loan must be current and of a type the servicer recasts (conventional or jumbo, but not FHA, VA or USDA). You also need to meet the servicer's minimum lump sum and pay the fee it charges.