Down payment options and assistance programs

An escrow account is held by your mortgage servicer to pay for your property taxes and homeowners insurance on your behalf. You pay a portion of these annual costs with each monthly mortgage payment. The servicer then manages the timely payment of these bills. Your escrow payment is reviewed annually, and your monthly amount may change if your tax or insurance premiums increase or decrease.

The process is generally simple:
1. Check Eligibility: Contact your lender to confirm they offer recasts and that your loan type qualifies (e.g., conventional loans often do; FHA/VA may not).
2. Make a Lump-Sum Payment: You must make a significant principal payment, which often has a minimum requirement (e.g., $5,000 or more).
3. Submit a Request & Pay Fee: Formally request the recast from your loan servicer and pay the associated processing fee.
4. Lender Re-amortizes: Your lender applies the payment and creates a new amortization schedule based on the lower principal.
5. Confirmation: You will receive confirmation of your new, lower monthly payment and the date it takes effect.

This usually comes down to fees. If Lender A and Lender B offer the same 6.5% interest rate, but Lender A has higher origination fees, their APR will be higher. This highlights why comparing APRs is essential for identifying the most cost-effective lender.

A Loan Estimate is a standardized, three-page form that you receive after applying for a mortgage. It provides key details about the loan you’ve applied for, including the estimated interest rate, monthly payment, total closing costs, and other critical loan features. Its purpose is to help you understand the offer and compare it to loans from other lenders.