What is a mortgage rewrite and why should you do it?

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A mortgage rewrite can help you lower your monthly payments without changing the repayment term or interest rate. Find out how it works. (Shutterstock)

Receiving a money boon might inspire thoughts of all the fun things you could do with the extra money. However, a wise use of the money could include making an additional payment on the principal of your home loan. This is referred to as mortgage rewrite. Once you make the additional payment, your lender will reamortize (recalculate) your mortgage based on the new, lower principal balance.

While the one-time payment doesn’t affect the term or interest rate of your existing mortgage, it could help you pay off the loan balance sooner. Or if your loan servicer offers a mortgage rewrite, you can reduce your monthly loan payment.

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What is a mortgage rewrite?

With a mortgage rewrite, your loan servicer recalculates your monthly mortgage payment after you make a large payment on the principal of your existing home loan. Before making your payment, you must specifically request and obtain permission to rewrite. Otherwise, your monthly payments won’t go down — although your high payment will still reduce your capital.

The rewrite should lead to a lower monthly payment and reduce your interest rates in the long term. The process is simpler and less expensive than refinancing, and your loan servicer doesn’t have to deal with your income, credit history, or debt-to-income ratio.

However, not all loan servicers offer mortgage rewrites. Those who do create a new amortization schedule after applying your large payment to the balance of your outstanding home loan. Your new monthly payment is based on the lower loan balance. Your interest rate and payout date will not change.

Before rewriting your mortgage:

  • Check with your mortgage servicer to see if they offer a rewrite. Not all service providers do this and few advertise it.
  • Ask if your loan type qualifies for a rewrite. Not all loan types qualify. For example, government loans such as FHA loans or VA loans cannot be reformulated.
  • Decide how much money you want to give your client. Minimum amounts may apply, which are typically $5,000 or more.
  • Find out if your servicer charges a mortgage rewrite fee. Some service providers do not charge for a mortgage rewrite, while others do.
  • Keep making your loan payments. Failure to do this could result in late payment fees and a negative flag on your credit report. You may also no longer be eligible for a rewrite.

Your credit servicer should do the following in response:

  • Let you know if they offer a mortgage review.
  • Check your loan type for eligibility.
  • Tell you the minimum flat rate that will be accepted.
  • Find out about any mortgage rewrite fees.
  • Be notified when the rewrite process is complete.


This is how mortgage rewriting works

Mortgage rewriting is a relatively easy concept to understand. Here’s an example of how it works:

Let’s say you were 15 years ago Borrowed $200,000 on a 30-year mortgage with a fixed interest rate of 4%. You now have approximately $129,000 in principal remaining and 15 years remaining on your loan. Your monthly payment is around $955.

A lump sum payment of $10,000 drops your equity to $110,000. Recasting that amount over 15 years would bring your monthly payments down to about $880.

The payment difference of about $75 per month for 15 years (180 months) totals $13,500. If you subtract the original $10,000 lump sum payment, the rewrite will save you $3,500 in interest over the life of the loan.

How long does the mortgage rewrite take?

If you are considering a mortgage rewrite, be aware that the process can take several weeks to complete. It is important that you make your regular payment each month during this time. If you don’t keep your loan payments up to date, you could become ineligible for the mortgage rewrite.

How many times can you repost a mortgage?

Some loan servicers allow you to rewrite a mortgage as often as you like, others limit the frequency. You may also have to pay a rewrite fee each time.


Should you remodel or refinance?

Consider these differences when deciding whether a refinance or rewrite might be right for you:

  • Revision of mortgages might be a better choice if you want to keep the same interest rate and repayment term as your existing mortgage and have extra money to invest in your home for a lower monthly payment. It also costs a lot less than a mortgage refinance.
  • Mortgage Refinance can be the right option if you want to replace your existing loan with a new one. It might allow you secure a lower interest rate and change your loan term. You could even make one refinance deposit to reduce your loan amount. However, you will have to pay closing costs, which can range from 2% to 5% of the loan amount.

Compare mortgage refinance rates on credible and Check if you qualify for a mortgage refinance at the moment.

Rewrite vs Loan Modification

A loan modification is another alternative to debt restructuring and can be beneficial in certain circumstances:

  • Revision of mortgages allows you to make a large payment against the principal of your loan, resulting in lower monthly payments. The interest rate and loan term do not change. If you’re considering a rewrite, you’re probably in good financial shape.
  • Loan Modification can help if you are behind on mortgage payments or facing foreclosure. Your loan servicer can extend your loan term, lower the interest rate, or defer the principal balance until you sell, refinance, or reach the end of your loan term to help you stay in your home when you are in serious financial distress. t refinanceable.

Qualifying for a mortgage rewrite

Not all loan servicers will remodel a mortgage, but if you do, you may need the following to qualify:

  • A traditional loan — You may not be able to reformulate an FHA, USDA, or VA loan.
  • A qualifying lump sum — Check with your credit service provider to make sure your payment meets the criteria. Many require a minimum amount for a rewrite.
  • An existing home loan that has a good reputation – If you have recently made late payments, you may not qualify.
  • At least two consecutive on-time payments at your current payment rate – Your loan servicer may not allow you to restate a loan you just took out.


Benefits of rewriting your mortgage

When you revise your mortgage, these are some of the benefits:

  • Lower Monthly Mortgage Payments — Rewriting your mortgage should result in a smaller loan balance with lower monthly payments.
  • interest savings — A smaller loan balance means less interest on your loan.
  • Same term — Rewriting a mortgage does not extend the term of your loan. And you still can pay off your mortgage early If you want.
  • Minimum Fees — The fees you pay for a mortgage rewrite are typically much lower than a refinance — maybe a few hundred dollars, depending on the loan servicer.
  • No Rating or Credit Check Required — Because no appraisal or credit check is required, it’s often easier to refinance a mortgage than it is to refinance one, especially if your home’s value has declined or your credit rating has declined.

Disadvantages of rewriting your mortgage

Of course, rescheduling a mortgage can also have disadvantages:

  • Money tied up in your house – If you use a lucky break to reduce your mortgage amount, you won’t have that money available for other uses. If you need money for an emergency, you have less available.
  • Unchanged Interest Rate — It’s possible to save more money by refinancing your mortgage instead of reinventing it.
  • Same term — A lump sum payment with no rewrite or simply making an additional payment each month could help you pay off the loan faster.
  • Small reduction in payments — A sizable lump sum can only slightly reduce your monthly payments.
  • Processing time – A mortgage revision can take several weeks to complete. During this time, you must continue to make your regular payments to keep your mortgage in good standing.

Is a Mortgage Rewrite Right for You?

In the right circumstances, rewriting your mortgage can make sense. If you have extra cash to spare and the interest rate on your existing home mortgage is low, it might help to revise your mortgage to get a lower monthly payment and avoid the cost of refinancing.

Another situation where a rewrite might make sense is if you bought a new home on a mortgage before selling your old home. Once your old home is sold, you may want to use the funds to pay off your new mortgage and recalculate your monthly payments, if your loan servicer allows it.

Still, there are times when other options might be more beneficial, e.g. B. Refinancing your mortgage when interest rates fall.


While Credible can’t help you revise your mortgage, you can Compare pre-qualified interest rates for a refinance loan from multiple lenders. This information could help you decide if refinancing, refinancing, or keeping your existing mortgage is the right decision for you.

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