can i pay 50k to my mortgage loan and ask bank to reduce monthly premium?

[rmJU72]

don’t payoff mortgage early if ur under 4% rate imo…find alternative investments if you can.

[Kielmitau]

Adjusting your mortgage game can be like fine-tuning a car for a smoother ride. While I'm joining the convo a bit late, maybe this can help others too.A friend considered a similar move and connected with a broker. It's like having a pro check under the hood before revving things up. Paying off a chunk and aiming to reduce your monthly premium sounds solid. Just remember, getting a pro's input can steer you right.So, when it comes to financial moves like this, getting advice from a Mortgage Broker in Basildon might sound unexpected, but they're like the GPS of money stuff. It's like having an experienced mechanic for your financial journey.

[Konebhar6]

7 minutes ago, Kielmitau said:

Adjusting your mortgage game can be like fine-tuning a car for a smoother ride. While I'm joining the convo a bit late, maybe this can help others too. A friend considered a similar move and connected with a broker. It's like having a pro check under the hood before revving things up. Paying off a chunk and aiming to reduce your monthly premium sounds solid. Just remember, getting a pro's input can steer you right.

If his mortgage is less than 4.5% it does not make sense to pay off. He can put it in a bank and get 5.25% interest. He will be making a profit. He can do a lot with this purchasing power.

If his mortgage is less than 3%, he can put it in Discover 10 yr CD and actually make money on it. 

18 months - 5%

3 Yr - 4.3%

5 yr - 4%

10 yr - 3.8%

[Undilaemanchikalam]

On 7/6/2023 at 9:00 AM, chicagoafdb said:

With current market paying 6% mortgage is better or using funds else where is better..another investment is stocks or investment home ? 

 

Here is my advice.

recast the loan if you have this scenario.

If Monthly interest + Insurance + HOA + taxes is more than renting a 3 or 4 bed room home then it make sense to recast.

for example, if you are paying $4000 as monthly payment for a 4-5 bed room home, where $3500 goes towards (interest + insurance + HOA + taxes + PMI) then check Zillow to see the rent for 4 bedroom home in the area, if it is $2500 to rent, then recast the loan to reduce monthly payment to $3500 instead of $4000, when interest rates reduce, refinance and reduce monthly payment to $3000 ( $2200 towards interest + insurance + HOA + taxes and $800 towards principal). This is what I learned from an American realtor. 

if you are on visa then above works fantastic, since we never know what happens due to either layoffs or visa issues, so regardless of interest rates, you should keep your monthly payment close to average rent in the area. 

[AverageDesiGuy]

On 7/5/2023 at 9:41 PM, JackSeal said:

Mortgage recasting will reduce monthly payment if you pay lumpsum without impacting your old interest rates. I did that last year.

Anna how much you paid if you don't mind?

[JavaBava]

Invest somewhere ani cheptuntaru .. dont fall for that .. all invesents are equally bad in todays market. Investing comes when you are living comfortbly. If huge emi is making you sleepless, then recast and lower your emi. Get peace of mind. And save for investments again.  

[jefferson1]

On 7/5/2023 at 7:16 PM, JackSeal said:

I did with Chase

I am with chase I will ask them 

[JavaBava]

On 7/5/2023 at 10:27 PM, pittagoda said:

Depending upon the bank you can do recast. I am saving for 18 months to pay off 350k and cost of recast is 500. Sep ki kadtha. Better to pay more during recast.  They only allow once. Same 3% but they will recalculate for 30 years and my monthly will go from 5250 to 3950. 

You could have paid whatever you have saved to principal every month and still could reuest recast on the last payment. That you could have saved a lot of interest in the last 18 months and still can recast later. 

[pittagoda]

15 minutes ago, JavaBava said:

You could have paid whatever you have saved to principal every month and still could reuest recast on the last payment. That you could have saved a lot of interest in the last 18 months and still can recast later. 

Interest won't reduce. Only the term will reduce..

[Undilaemanchikalam]

15 minutes ago, JavaBava said:

You could have paid whatever you have saved to principal every month and still could reuest recast on the last payment. That you could have saved a lot of interest in the last 18 months and still can recast later. 

Could you please explain more on this?

I thought paying additional amount to principal every month will reduce duration of loan but monthly payments and interest paid each month will be same. 

[Konebhar6]

1 hour ago, Undilaemanchikalam said:

Here is my advice.

recast the loan if you have this scenario.

If Monthly interest + Insurance + HOA + taxes is more than renting a 3 or 4 bed room home then it make sense to recast.

for example, if you are paying $4000 as monthly payment for a 4-5 bed room home, where $3500 goes towards (interest + insurance + HOA + taxes + PMI) then check Zillow to see the rent for 4 bedroom home in the area, if it is $2500 to rent, then recast the loan to reduce monthly payment to $3500 instead of $4000, when interest rates reduce, refinance and reduce monthly payment to $3000 ( $2200 towards interest + insurance + HOA + taxes and $800 towards principal). This is what I learned from an American realtor. 

if you are on visa then above works fantastic, since we never know what happens due to either layoffs or visa issues, so regardless of interest rates, you should keep your monthly payment close to average rent in the area. 

Would you offer this advice even if his mortgage is less than 4.5%?

[Konebhar6]

On 7/5/2023 at 8:27 PM, pittagoda said:

Depending upon the bank you can do recast. I am saving for 18 months to pay off 350k and cost of recast is 500. Sep ki kadtha. Better to pay more during recast.  They only allow once. Same 3% but they will recalculate for 30 years and my monthly will go from 5250 to 3950. 

If you put this 350k in a Fixed deposit @ 5 or 5.5% interest, you are getting $17,500 per year in interest. That's $1450 per month. 

So in theory your monthly payments are only $5250-$1450 = $3800 with $350k still in your pocket. 

What am I missing here? Its not like these are risky or complex investments.

[Konebhar6]

46 minutes ago, Undilaemanchikalam said:

Could you please explain more on this?

I thought paying additional amount to principal every month will reduce duration of loan but monthly payments and interest paid each month will be same. 

Check with your vendor if they allow re-case on your loan. If they do, there is a one time small fee and you can pay lumpsum. They will re-calculate your monthly payments based on the new balance. 

You can use bankrate to play around and see how much your new payments will be.

[JackSeal]

1 hour ago, AverageDesiGuy said:

Anna how much you paid if you don't mind?

While closing I paid like 5%, soon after closing paid another 15%. So asked chase to recast mortage and they did it. No extra charges.

[usauae]

44 minutes ago, Konebhar6 said:

Check with your vendor if they allow re-case on your loan. If they do, there is a one time small fee and you can pay lumpsum. They will re-calculate your monthly payments based on the new balance. 

You can use bankrate to play around and see how much your new payments will be.

Are there any disadvantages of recast bhayya ?