Friday Flight - Shrinking Your Mortgage Payment, WTD with Expiring Travel Vouchers, & Food Freebies #336

Recasting

Joel Larsgaard and Matt Altmix discuss the benefits of recasting your mortgage as a strategy to reduce monthly payments. Unlike refinancing, recasting involves making a lump sum payment towards the loan principal, which lowers the monthly payment without changing the loan term or interest rate 1. This method is often fee-free and can be a viable option for those with extra funds on hand 2.

Recasting is nice if that lower payment is something that you really, really want, although it can also make sense just to make a lump sum payment to the principal and keep your payment the same.

--- Joel Larsgaard

Matt and Joel highlight that while recasting can be beneficial, it assumes that paying off the mortgage is a top priority when extra cash is available 2.

   

Payment Priorities

The hosts also discuss whether aggressively paying off a mortgage should be a top priority in the current low-rate environment. Matt suggests that investing extra funds in tax-advantaged accounts might be more beneficial for long-term financial health 2. Joel agrees, noting that paying off a mortgage quickly is often more of an emotional decision than a financially sound one.

Given the insanely low rate environment that we're in, aggressively paying off the loan on your home is, you know, we think for most people, not the best way to handle extra cash on hand.

--- Matt Altmix

They recommend evaluating individual financial situations and considering other investment opportunities before prioritizing mortgage payments 2.