![]() ![]() ![]() We made a pretty substantial principal payment. Once we got through, it was a fast, simple process. The department that handled recasts had limited hours and the service was not advertised. We did a recast (Wells Fargo) years ago and was one of the best decisions we've made. I might pay a good chunk towards my principal at that time, and lower my monthly payment enough to stay at the necessary annual income to qualify. For example, with Rocket Mortgage, it's a simple $250 fee to recast your mortgage.Īs I approach FIRE in a few years, I'm going to look at the ACA subsidies at that time, and determine my best way to stay under the caps. ![]() And also unlike a refinance, it doesn't come along with hefty fees, a credit check, or tons of paperwork. Unlike a refinance, nothing about the mortgage changes, except for the size of the monthly payment. I haven't seen recasting discussed much here (a search for the term "recast" revealed no posts from the last year), so here are two good articles on recasting:īasically, you pay off a good chunk of your principal, then ask the bank to recalculate your monthly payments, with the same interest rate and final payment date that you currently have. And if that's your goal, or if you just want to strike a middle ground between the two sides, consider paying off some of your principal, and recasting your mortgage instead. ![]() One financial argument for paying off your mortgage that I've seen discussed recently is that by paying off your house, it's easier to lower your yearly income enough to qualify for ACA subsidies, which can save thousands of dollars every year. In general, not paying off your mortgage is the better long-term financial decision, but paying off your mortgage gives you a sense of freedom and stability that can't be beat. One question that is frequently asked in this subreddit is, "Should I pay off my mortgage or invest the money?" Every time it's posted, we get the same arguments from both sides, and both sides have really good points.
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