Wells Fargo Mortgage Recast

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September
Posts: 82
Joined: Tue Nov 11, 2008 10:40 am

Wells Fargo Mortgage Recast

Post by September » Sun Aug 12, 2018 10:24 am

There are a few threads on mortgage recast in this forum and I did read them before asking this question again. Thanks in advance for your patient to read my recast question:)

Some background information: I have a 15 year mortgage with Wells Fargo initiated in 2012 @ 2.875% at a monthly payment of $2000. Over the last 6 years, I paid a significant amount of extra principal that Wells Fargo told me I am qualified for a free recast. They sent me the recast paperwork, indicating that the unpaid principal is approximately $93,000, and the new monthly payment is about $1300.

My question is:

Are there any downsides for no-fee recast?

I couldn't think of any. Initially I liked the idea of paying off the mortgage early. Lately after some unexpected expense came up, I realized that I need some flexibility and I'd like to improve my cash flow. Additionally, I am planning on doing some remodeling work and delayed maintenannce (roofing etc) on my house. Since the interest rate went up recently, the extra cash saved can be invested somewhere else rather than paying off the low interest loan.

Disclaimer: I do have emergency fund saved, such as I-bond, but I don't think that it's a good idea to tap into that and pay taxes.

The extra principal amount used in Wells Fargo new mortgage calculation is much less than what I paid. I can't verify this online because their online system only saves statements for two years. I will call them later to find out why this is the case.

The recast document needs to be notified. I will go to my local bank to get this done.

Thanks!

Church Lady
Posts: 484
Joined: Sat Jun 28, 2014 7:49 pm

Re: Wells Fargo Mortgage Recast

Post by Church Lady » Sat Sep 01, 2018 10:19 pm

I take it they want you to pay them a lump sum as part of the recast? How much, and how does the lump sum affect your liquidity? Bumping this thread up for the weekend.
He that loveth silver shall not be satisfied with silver; nor he that loveth abundance with increase: this is also vanity. Ecclesiastes 1:8

tjgardner
Posts: 11
Joined: Sat Mar 19, 2016 9:54 am

Re: Wells Fargo Mortgage Recast

Post by tjgardner » Sat Sep 01, 2018 10:47 pm

My Wells Fargo mortgage is eligible for recast at any time. Essentially, they recalculate the current balance over the remaining term. If you have been paying down early, then your likely end date has been moving up. With the recast, if you pay only the newly defined payment, you will pay that for the remaining term of the 15 years (9 at this point?). Of course, you can still pay more and be done quicker. But if you pay the new payment only, you will still be paying through the full 15 years. I may consider this if, as you point out, I would like to simply pay less for cashflow purposes.

AspireToRetire
Posts: 13
Joined: Sat Jun 10, 2017 6:35 pm

Re: Wells Fargo Mortgage Recast

Post by AspireToRetire » Sat Sep 01, 2018 10:48 pm

I would read the fine print very carefully, especially with all the hot water Wells Fargo has been in recently. If everything checks out and it is indeed a free recast, then I would do it in a heartbeat.

Same interest, but lower monthly payment required which reduces your risk. Of course you can still pay the same amount as before if you would like! :beer

delamer
Posts: 6263
Joined: Tue Feb 08, 2011 6:13 pm

Re: Wells Fargo Mortgage Recast

Post by delamer » Sun Sep 02, 2018 12:32 pm

You need to get your principal still owed reconciled regardless of whether you decide to go ahead with the recast or not.

I’d think WF could supply you an amortization statement for your loan to date.

Do you have good records showing all of your principal prepayments?

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