Has anyone actually recast a mortgage, and did the payment drop enough to be worth the paperwork? Mortgage Mechanics

Did one two years ago. The website said nothing about it either — I had to phone and use the word "recast" specifically, because the first two people I spoke to tried to sell me a refinance. Once I got to the right department it was a form, a fee in the low hundreds, and about six weeks. Payment dropped in proportion to the principal reduction, term stayed exactly where it was, rate untouched. Exactly what I wanted and almost impossible to find on their site.

Ran the alternative and chose it instead. Putting the same money in as an ordinary principal-only payment saves you exactly the same interest and shortens the term, without a fee and without a form. The difference is entirely about whether you want a lower required payment or a shorter loan. With variable income you have already answered that, so the fee is buying you flexibility, not interest savings. Worth being clear about that, because a lot of people recast expecting an interest benefit that a plain principal payment would have given them for free.

One thing worth checking while you have them on the phone: if you are paying mortgage insurance, ask how the lump sum interacts with it. Under the federal rules the automatic termination point is tied to 78% of the original value on the original schedule, and you can generally request cancellation at 80%, but a big principal payment does not automatically move those dates on its own. Get their written answer rather than a phone answer.

Mine refused. Servicer's policy was that they only recast loans they still owned rather than ones they serviced for someone else, and mine had been sold. Six weeks of phone calls to find that out. Ask early, ask for the policy in writing, and do not send the lump sum until you have it.

Important eligibility point that catches people: recasting is generally a conventional-loan feature. Government-backed loans — FHA, VA and USDA — are not eligible, so if yours is one of those the answer is no regardless of how nicely you ask. You said conventional, so you are in the right category, but it is worth confirming in writing which product you actually have rather than what you remember signing.

Terse: phone, say the word recast, escalate past the first two people, get the fee and the minimum in writing. Have someone qualified look at it if the amount matters to your year.