Maybe You Should Consider Recasting?

Have you ever heard of recasting or re-amortizing? Yeah, I hadn’t either but this could be another way to lower your mortgage payments.

According to Daily Real Estate News recasting means the borrower pays off a lump sum of the loan’s principal and then resets monthly payments at the loan’s original interest rate and terms. For example:

$230,449 is left on a 30-year fixed rate loan for a $300,000 mortgage taken out at 7.93 percent in 1995. The borrower pays $20,000 toward the principal and asks the lender to re-amortize their payments over the remaining 15 years of the loan. The monthly payment then drops by $52, from $2,187 to $2,135 per month. ($100,000 toward the lump sum would save $730 a month.)

The best part is you are not asking for a new loan so no closing costs or credit checks! Sweet! Recasting is something to consider if you know you are going to be getting a large sum of money.

Don’t Limit Your Options

Selling a house in today’s market is about appealing to as many potential buyers as possible.

Demanding all cash will severely limit the number buyers able or willing to buy a home.  At least 93% of buyers don’t pay cash.

The more appealing the financing package, the more buyers will be attracted to the home.  A seller unwilling to accept a FHA or VA contract will eliminate up to half of the buyers in a given market.

A selling who is willing to make financing concessions to pay part or all of the buyer’s closing costs or possibly an interest rate buy down would surely attract purchasers who might not have considered their home prior.

A better than normal financing package will distinguish a home from its competition which is very important when inventories have increased and there are so many homes for sale.  Price is an obvious adjustment to make to increase the marketability of a home but terms may actually be more important to the buyer.

Buyers cannot purchase a home in today’s market without having good credit but they’re still concerned with how much cash it will take to get into the home and what the monthly payments will be.  As a real estate professional skilled and trained in financing and negotiations, we can structure a transaction to meet the goals of the buyers and sellers. Need more info?  Call for a no obligation discussion.