How does it work?

Take for example, a loan with a balance of $98,000 and is scheduled to pay off (mature) in May 2055. Based on a 6.25% interest rate, the monthly principal and interest payment is $603. In this example we will assume a $20,000 lump sum to pay down the loan.

A recast would modify the loan to account for the lump sum payment and adjust the principal and interest payment to roughly $480, and the payoff (maturity) date would remain May 2055.

For comparison, if the same lump sum payment were applied but chose not to complete a recast, the monthly payment would remain $603. However, the loan would pay off in June 2043 and yield a reduction of about $65,000 in interest over the loan term.

The example is an estimate for illustrative purposes; individual savings can vary based on timing of paying the lump sum payment. Utilize our online tools by logging into your Servicing Digital account and accessing the loan calculator under My Home tab or contact Customer Service for details on how extra principal payments can save you.

Is there a fee?

Yes, the fee to recast a mortgage is $300.

What are the qualifications?

• You must have a conventional loan owned by Fannie Mae or Freddie Mac. (Refer to your monthly mortgage statement)
• You must make your first payment due on the loan before the request can be processed.
• The monthly payments must be current with no other amounts outstanding.
• The request must be made at least 90 days prior to a scheduled interest change on an adjustable-rate mortgage (ARM).
• If your loan has Private Mortgage Insurance (PMI), the recast request must also be approved by the insurer.
• You must make a lump-sum principal payment of $10,000 or more. (Payments of $30,000 or more must be paid via bank wire or certified check.)

How do I get started?

• Option 1 Wire Transfer - Complete the Online Recast Request Form and wire your lump-sum payment plus $300 recast fee. Wiring instructions will be emailed to you upon submission of the form.
• Option 2 Certified Check - Complete and sign the Printable Recast Request Form. Mail the completed request Form, $300 recast fee and lump sum principal payment to the address indicated on the form.