Mortgage Recast
What Is It?
- Since you are paying down your principal by a large amount, the monthly payment will be lowered, but your interest rate and loan terms will remain the same.
- You will pay less total interest on your loan due to the lowered principal balance. Alternatively, you would pay even less interest if you paid down the principal amount without recasting and just pay the loan off early.
How Do I Recast My Loan?
Recast Process at Flagstar Bank
Check your eligibility above.
Submit the recast request form and pay the recast fee, if required in your state.
Make the principal payment.
Note: If the principal payment is made before submitting the form and paying the fee, the process may be delayed.Sign and return the Recast Agreement.
Note: The Recast Agreement lists the new, lower monthly payment amount.We will reamortize your mortgage loan accordingly.
You will see the new monthly payment amount reflected in your monthly billing statement, as of the effective date.
Note: The recasting process can take up to 90 days.
Requirements and Details of a Recast
Minimum Amount – Flagstar Bank may require a minimum principal payment of $10,000.
Recasting Fees – There may be a non-refundable fee of up to $250 to recast your mortgage.
Mortgage Term – The term (length) of your mortgage remains the same.
Example If you recast 10 years into a 30-year mortgage, you will still have 20 years left on your term.Investor Restrictions – Currently, government-backed loans are not eligible for recast. This includes loans with investors like VA, FHA, GNMA, and USDA.
Loan Type – Interest-only, Option ARMs, and commercial loans are also not eligible.
Credit Worthiness – There are no credit checks or requirements for mortgage recasts.
Interest Rate – Your interest rate stays the same, which could be a benefit over refinancing if you’ve already locked in a low rate—or a negative if your rate is particularly high for the current market.
Recent Transfers – Recently transferred accounts may need to wait 90 days before recasting.
