Paying Extra on Your Mortgage? Recast It First

You've been paying extra on your mortgage for years, and your payment hasn't dropped a dollar. I ran one couple, both 64 and retiring at the end of the year, with $300,000 at 3% from a 2021 refinance and an extra $400 a month since the first payment. By December that's $28,000 of extra, and the payment is still $1,264.81. A $5,000 check and a recast take it to $1,092.28, and $148.27 of that drop is money they already sent. In this video: • Why extra principal shortens the loan but never lowers the payment • What a recast does: same rate, same last payment date, a new payment on today's balance • What servicers ask for: the minimum, the fee, and whether your past extra counts toward it • Where the drop comes from: the new check versus the extra you already paid • The catch: the lower payment runs the loan back to its original end and costs more interest • Four ways to retire with this loan, from finishing at 79 to the lowest payment • What a lower required payment is worth in retirement, and in a bad market year • Your own number, a bigger check, a newer 6.5% loan, and whether saving it up first would have done better • When I wouldn't recast: almost paid off, selling soon, FHA, VA and USDA loans, and your emergency money ⏱️ CHAPTERS 0:00 $28,000 extra, the same payment 0:45 The couple on the table 1:57 Why the payment never moved 3:04 The recast 4:48 What it does to their payment 6:23 The catch 7:21 Four ways to retire with this loan 8:45 What the lower payment is worth in retirement 10:11 Your number 11:38 Should they have saved it instead 12:31 When I wouldn't recast 14:09 What I would do 15:28 Recap 📅 WORK WITH ME — I'm a licensed mortgage loan officer (NMLS 410420). If you want a second set of eyes on your loan before you call your servicer, book a free call: https://brokerdave.com/book 🧮 FREE RECAST CALCULATOR — your balance and a lump sum in, your new payment out: https://brokerdave.com/recast-calculator 📧 ASK ME A QUESTION — not ready for a call? Email me and I'll answer it: ask@brokerdave.com 📱 SAVE MY CONTACT — https://lurbee.com/c/david-lurvey SOURCES AND ASSUMPTIONS FOR THE FIGURES IN THIS VIDEO • One worked example: a married couple, both 64, retiring at the end of 2026. A 2021 thirty-year refinance, $300,000 at 3%, principal and interest $1,264.81, with $400 a month of extra principal since the first payment ($28,000 by December 2026). The recast is modelled after the December 2026 payment with a $5,000 lump sum over the 290 payments left. • Recast rules: Fannie Mae Servicing Guide F-1-09 and C-1.2-01, Freddie Mac Guide 8103.3(d), HUD Handbook 4000.1 III.A.1.e.iv, 38 CFR 36.4315 and 7 CFR 3555.303, plus the recast pages of Chase, Bank of America, Rocket, Pennymac, Truist, Lakeview, U.S. Bank and New American Funding, all checked October 7, 2026. Minimums ran from none to 10% of the balance and fees from $0 to $300. Your own servicer's rules are the ones that count. • Savings: the top high-yield savings accounts paid about 4% to 4.25% APY in early October 2026, against a 0.37% national average. • Mortgage rates: Freddie Mac's weekly survey had the 30-year fixed at 7.28% on October 1, 2026. • Savings modelled at 4.0%, taxed at their 12% bracket, so 3.52% after tax. • The rung figures use the same loan and the same December recast with a $5,000 lump. The 6.5% example is a $300,000 thirty-year from 2023 with $300 a month of extra for three years. • This is education, not tax, legal or financial-planning advice. I'm a licensed mortgage loan officer, not a financial planner. Call your own servicer for its rules before you send anything. David Lurvey | NMLS 410420 | Cornerstone First Mortgage NMLS 173855 | Equal Housing Lender | educational, not personalized financial advice