Also, loan recasting/ mortgage recasting), a process involving a re-amortization of an existing loan, without changing the loan’s term or interest rate. This happens through making a lump-sum payment that allows a borrower to pay off the loan sooner than planned. Effectively, a borrower can simply lower monthly payments on the loan while also paying less interest over the term of the loan.
In this sense, recasting is the re-amortizing of an existing loan, with the same lender, but specific changes in the structure of the loan. Contrast to refinancing, recasting is less cumbersome in terms of lower costs and time (legwork, etc.) It reduces a borrower’s monthly expenses, but it does not change the loan terms or interest rate.
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