Loan recasting is a process that can provide borrowers with a more affordable monthly mortgage payment. It involves taking an existing mortgage and reorganizing the loan. Usually, this is done by replacing or reducing the monthly payment through adjustments to the loan's interest rate.

One common approach to recasting a loan involves adding a lump sum of money to the loan balance for lowering the payment amount. This can be achieved by the borrower paying a single upfront payment towards the principal balance. By increasing the initial balance, the interest rate is applied to the larger figure, meaning the monthly payments decrease for the remaining term. This strategy can be particularly beneficial when current interest rates drop than the existing interest rate.

Another method of loan recasting is the switching to an interest-only option with a lower monthly payment, but such alternatives come with higher risks if they become necessary to reassess. Borrowers may also consider a mortgage term extension, lowering payments at the cost of on the loan.

When considering a loan recast, borrowers should also be aware of the expense of various fees associated with the process, including application costs and fees. Compared to refinancing a mortgage, loan recasting typically offers the expedited loan revision process the loan without a new credit inquiry affecting the credit report. Borrowers who engage in this method can also be required to provide employment verification documents or pay income taxes on an increased loan balance for financial reporting.

Ultimately, loan recasting can be an ideal option for borrowers who wish to benefit from an uneven payment or low interest rate. Borrowers must consider the benefits and 日本政策金融公庫 個人事業主 drawbacks of this procedure and weigh them carefully against their individual financial needs to avoid any financial setbacks.