Refinancing -vs- Recasting
Refinancing a mortgage is when you apply for a new mortgage and use it to replace the existing mortgage. In most cases this is done to lower an existing interest rate, consolidate bills or to get cash out of the equity. Refinancing requires lender loan approval and typically involves normal closing costs and escrow collection.
is when you pay a lump sum toward the principal balance in order to redo your payments based on the new lower principal balance. In most cases this is done when one comes into additional funds from selling an existing property. Recasting involves a small fee and the approval process can be easier than a refinance.