What is recasting a mortgage and how is it different from refinancing?

Recasting means you make a large lump-sum payment toward principal, and the lender re-amortizes the remaining balance over your existing term – lowering your monthly payment while keeping the same rate and loan. It usually costs a small flat fee (often a few hundred dollars), with no new application, appraisal, or closing costs. Refinancing replaces your loan entirely with a new rate and term and full closing costs. Recasting shines when you have a low rate you want to keep but a windfall to put down, like proceeds from selling another home. The catch: your rate doesn't change, so it won't help if today's rates are far lower than yours. Not every loan type allows recasting, so ask your servicer first.