What is a Recast Mortgage Calculator?
A Recast Mortgage Calculator is a helpful tool that allows you to estimate how much your monthly mortgage payments will be after you have made an additional lump sum payment towards the principal balance of your loan. This can be particularly useful if you come into some extra money and want to see how it will affect your ongoing mortgage payments.
How Does a Recast Mortgage Calculator Work?
When you make a lump sum payment towards the principal balance of your mortgage, the total amount of the loan will decrease. This will result in a lower monthly payment, as the interest you owe will be calculated on the reduced principal balance. The Recast Mortgage Calculator takes into account the new principal balance and the remaining term of your loan to provide you with an estimate of your new monthly payment.
Benefits of Using a Recast Mortgage Calculator
There are several benefits to using a Recast Mortgage Calculator. It allows you to see how making extra payments towards your mortgage principal can lower your monthly payments and potentially save you money in the long run. By knowing how much your monthly payment will be after a lump sum payment, you can better plan your finances and budget accordingly.
How to Use a Recast Mortgage Calculator
Using a Recast Mortgage Calculator is easy. Simply input the current balance of your loan, the interest rate, the remaining term of the loan, and the amount of the lump sum payment you plan to make. The calculator will then provide you with an estimate of your new monthly payment after the lump sum payment.
Factors to Consider When Using a Recast Mortgage Calculator
It’s important to remember that the estimate provided by the Recast Mortgage Calculator is just that – an estimate. The actual amount of your new monthly payment may vary slightly based on factors such as your credit score, changes in interest rates, and any additional fees that may be associated with recasting your mortgage. It’s also a good idea to speak with your lender to get a more accurate picture of how a lump sum payment will affect your mortgage payments.
In Conclusion
Using a Recast Mortgage Calculator can be a valuable tool in helping you understand how making extra payments towards your mortgage principal can affect your monthly payments. By using this tool, you can better plan your finances and potentially save money in the long run. Remember to consider all factors and consult with your lender before making any decisions regarding your mortgage payments.
