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If you come into some extra funds, you might want to consider applying them to your mortgage. It’s a great way to pay down the principal or lower your monthly mortgage payment. Lowering your monthly mortgage payment is particularly helpful if you often have cash-flow issues.
There are ways to lower your monthly mortgage by using recasting or refinancing. Each option works differently, so it’s important to understand how they compare.
Recasting a Mortgage
Mortgage recasting is when you make a lump-sum payment to your principal balance. Once done, your lender then calculates a new, lower monthly payment. Your interest rate stays the same.
