Recast
Also called: mortgage recast, re-amortization
Re-amortizing an existing loan after a large principal payment, lowering the monthly payment while keeping the rate and term.
You make a lump-sum payment toward principal, and the servicer recalculates the payment over the remaining term. The note rate does not change and there is no new loan, so a recast avoids the cost and underwriting of a refinance.
Not every loan or servicer permits it, and there is usually a fee and a minimum lump sum. A recast lowers the payment; it does not shorten the term.
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