After a large principal payment, a recast re-amortizes your remaining balance so the monthly payment can drop — without refinancing, changing your rate, or opening a new loan. Investor and servicer rules vary, so Ryan and Steve confirm eligibility before anyone promises a date or a payment.
Sending extra principal reduces what you owe. It does not automatically change the billed monthly payment until a recast is approved and processed.
After a substantial principal reduction, the updated monthly payment typically will not be reflected immediately. The servicer still has to recast the loan.
In many cases, borrowers should expect approximately 2–4 weeks for the recast to be processed after the required principal payment has been made and all investor and servicer requirements have been satisfied.
We do not promise a specific recast timeline or eligibility until the applicable investor and servicer requirements have been confirmed for your loan.
A recast keeps your interest rate and remaining term. It only recalculates the payment on the lower principal balance.
The loan generally must be current. Bring any past-due amount current before requesting a recast.
Your loan may be sold to an investor or retained for servicing. Recast rules follow that investor, not a one-size-fits-all checklist. Borrowers should generally be advised of the items below, then wait for confirmation on their specific loan.
There may be a recast fee, typically in the $250–$500 range. The exact amount depends on the investor and servicer.
Most recasts are available only when the mortgage is current, with no outstanding late payments.
A minimum principal reduction is typically required, often around $10,000. Some investors set a higher floor.
Additional investor or servicer requirements may apply — documentation, occupancy, or product restrictions included.
Before a recast can be completed, some investors may require extra time after closing. That is another reason we set realistic expectations at the beginning of the process.
Both can lower a payment. They are not the same tool.
As a general expectation — not a guarantee — borrowers should be prepared for this sequence.
Step 1
Get the loan current and through any required seasoning, onboarding, or securitization window.
Step 2
Send the required lump-sum principal — often around $10,000 or more — after we confirm the investor minimum and fee.
Step 3
Once the payment and requirements are in, processing commonly takes approximately 2–4 weeks before the new monthly amount appears.
On eligible agency loans, keeping servicing with Luminate Bank gives Ryan and Steve more control and visibility into the recast. That lets us coordinate with our servicing team instead of sending you to an unknown servicer to ask about a payment that has not updated yet.
Not every loan is retained, and not every retained loan is recast-eligible. We will tell you which situation you are in before you plan a principal payment around a new monthly bill.
Related guides if a recast is not the only option on the table.
Refinance, cash-out, reverse mortgage, and other options if a recast is not the right fit.
Compare a recast with a rate-and-term refinance.
A large principal payment can also help you reach the PMI-removal threshold.
Ask Ryan or Steve to review recast eligibility on your loan.
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A recast (also called a re-amortization) is when you make a substantial principal reduction and the servicer recalculates your remaining monthly payment over the same term and interest rate. You keep your existing loan — you are not refinancing.
Usually not. After a large principal reduction, the updated monthly payment typically will not be reflected immediately. In many cases, borrowers should expect about 2–4 weeks for the recast to be processed after the required principal payment has been made and all investor and servicer requirements have been satisfied.
Requirements vary by investor, but borrowers should generally expect a recast fee of about $250–$500. We will confirm the fee that applies to your specific loan before you proceed.
A minimum principal reduction is typically required, often around $10,000. Some investors set a different minimum. Do not send a lump-sum payment expecting a recast until we confirm the amount your investor and servicer will accept.
Yes. The loan generally must be current. Late payments can delay or block a recast until the account is brought current and any other investor conditions are met.
Not always. Before a recast can be completed, some investors may require a minimum number of payments, the loan to be fully onboarded by the servicer, or the loan to be securitized. That is why we set a realistic timeline at the beginning of the process.
No. The loan may be sold to an investor or retained for servicing, and recast rules differ by investor and servicer. Additional requirements may apply. We will not promise eligibility until those requirements have been confirmed for your loan.
A recast keeps your existing rate, term, and loan number and only lowers the payment after a principal reduction. A refinance replaces the loan, which can change your rate and term but involves a new application, closing costs, and underwriting.
Tell Ryan or Steve your loan type, balance, and how much principal you can apply. We will check investor and servicer rules before anyone counts on a new payment date.