1. What is mortgage recasting and how does it work?

Mortgage recasting lets you make a lump-sum payment toward your principal balance and have the lender recalculate a lower monthly payment while keeping the same interest rate and loan term. It’s a way to reduce payments without refinancing.

2. How do I qualify for a mortgage?

Lenders look at your credit score, debt-to-income ratio, employment history, and available funds for a down payment and closing costs. A stronger credit profile and stable income improve approval chances.

3. What’s the difference between pre-qualification and pre-approval?

Pre-qualification is an estimate of what you can afford based on self-reported data. Pre-approval is a lender’s conditional commitment after reviewing your credit, income, and assets—giving you stronger buying power.

4. How much down payment do I need?

Conventional loans often require 3%–20%, FHA loans need as little as 3.5%, and VA/USDA loans may allow zero down. A larger down payment can lower your rate and eliminate private mortgage insurance (PMI).

5. What is PMI and when can I remove it?

Private mortgage insurance protects the lender if you default. You can typically remove PMI once you reach 20% equitythrough payments or rising home value.

6. Should I choose a fixed-rate or adjustable-rate mortgage (ARM)?

A fixed-rate mortgage offers predictable payments for the life of the loan. An ARM starts with a lower rate but can adjust after an introductory period, which may lower initial costs but carries future rate risk.

7. What are typical closing costs?

Closing costs generally range from 2%–5% of the loan amount and can include lender fees, title insurance, appraisal, and prepaid taxes or insurance.

8. Can I pay off my mortgage early?

Yes, but check for prepayment penalties. Paying extra toward principal reduces total interest and shortens the loan term.

9. What’s the difference between refinancing and recasting?

Refinancing replaces your existing mortgage with a new one—often to secure a lower rate or change the term. Recasting keeps the original loan but lowers payments after a lump-sum principal payment.

10. How does my credit score affect mortgage rates?

Higher credit scores typically qualify for lower interest rates, saving thousands over the life of the loan. Review your credit report, pay down debts, and avoid new credit inquiries before applying.