The Quick Read: A recast keeps your current jumbo loan and lowers the monthly payment after you make a large lump-sum payment. A refinance replaces the loan with a new one. Recast suits you if you like your current loan and have cash from a vest to put toward it. Refinance suits you if you want to change the loan itself, such as the structure, the term, or access to equity.
Here is the honest version. If your vested stock has turned into cash and your only goal is a smaller payment, a recast is the simpler tool, but only if your servicer allows it. Jumbo loans are often held by the investor or a portfolio holder, and that holder decides. If you want to change the loan, or your servicer says no to a recast, a refinance is the tool. It re-checks everything, including how your stock pay is counted.
Refinance savings and break-even estimate
The starting figures are an example value with a balance in proportion and a placeholder for costs. Replace them with yours, and enter the current rate from your statement.
Editable benchmark: 7.40% as of October 15, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $245,000 current balance, a current rate you enter and a remaining term seeded at twenty-five years, closing costs seeded at $5,000 as an editable placeholder (not a fee quote) and rolled into the new loan, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The new rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a refinance quote; a refinance is priced by the lender at lock, and the current rate, the remaining term and the closing costs are figures you enter. The current payment is estimated from the balance, the current rate and the remaining term; the break-even divides the closing costs by the monthly saving and ignores the interest effect of a longer term. On the VA IRRRL the funding fee is added to the loan unless the veteran is exempt. Taxes and insurance are editable estimates. Licensed in sixteen states for consumer mortgages; Lendmire is a broker, never the lender.
Lendmire arranges jumbo loan programs through wholesale lenders. On the headline lane, files typically start from a 660 decision score, with leverage up to 90% and loan amounts up to $5,000,000, all subject to lender guidelines and full file review. That envelope matters for the refinance side of this choice. A recast has no such envelope, because nobody re-approves you.
Side-by-Side
The table shows what each path actually changes. It leaves out pricing on purpose, because pricing depends on your file and the day you apply.
| Factor | Jumbo Recast | Jumbo Refinance |
|---|---|---|
| What it is | Lump sum, then re-amortize | New loan pays off old one |
| Loan structure | Stays the same | Can change (fixed, adjustable, interest-only) |
| Term and payoff date | Unchanged | New term, possibly longer |
| Leverage test | None | Yes, to 90% on the headline lane |
| Credit floor | Generally no new credit decision | Yes, 660 decision score on headline lane |
| Mortgage insurance | Nothing new added | Depends on lane and leverage |
| Appraisal | Generally not required | Typical, two on larger loans |
| Income documentation | Generally none | Full, including stock pay |
| Cash out | Not possible | Possible, at lower leverage |
| Cancellation window | Not applicable | Short window on a primary home |
Treat the "generally" rows as questions for your servicer. Policies vary by servicer and holder.
What Actually Changes When RSUs Vest
Restricted stock units are shares your employer promises you. They become yours when they vest. At vest, a portion is typically withheld or sold to cover taxes. So the cash you can put toward a mortgage is smaller than the headline vest value. Plan from the net number.
That net cash creates the decision. You could put it toward the loan, keep it invested, or hold it as a cushion. A recast makes sense only if you want the cash in the house.
Two other facts shape the choice. Vesting is lumpy, and a refinance has to judge that lumpiness. A recast does not. If your vest history is short or uncertain, that tilts toward a recast. That is analysis, not a rule, and your own lender will have the final word.
When a Recast Is the Better Fit
A recast fits when you like the loan and want only one thing changed: the payment.
Picture a software engineer who bought a home with a jumbo loan and now holds a large block of vested shares. The monthly payment takes a big bite out of take-home pay. The structure of the loan is fine. A recast fits this person well, for several reasons:
- The loan stays as it is. The interest rate and payoff date on your note do not move. Only the required payment drops.
- No new approval in most cases. Fannie Mae's own description of a recast loan it will buy says the only change to the note is a lower payment, and the borrower was fully qualified on the original amount. That is the reference framework for conforming loans. A jumbo sits outside it, so your holder's policy governs.
- Your stock pay is not re-judged. A refinance has to document and average variable income. A recast skips that review, generally.
- Costs are usually a servicer fee. You skip a full set of new settlement charges. The fee amount is servicer-set.
The tradeoffs are real. The cash you send in is no longer liquid. A recast cannot be undone. And if your employer has layoffs in the cards, tying up your cushion in the house deserves a hard look.
Also, a recast does not change the loan's category. It was a jumbo before, and it is a jumbo after, even with a smaller balance. That is a reasonable reading of the original-note-amount language, so confirm it with your servicer.
When a Refinance Is the Better Fit
A refinance fits when the loan itself is the problem, or when a recast is off the table.
Say the same engineer's servicer replies that this loan cannot be recast. Or the loan has an adjustable or interest-only structure that the engineer wants out of. Or the engineer wants to pull equity out. In each case a refinance is the real answer. Here is what it brings:
- Structure changes. Wholesale jumbo lanes offer fixed, adjustable, and interest-only structures. You can move to a different one.
- Term changes. A new loan may have a new term. As the CFPB's refinance handout notes, a longer term can lower the payment but raise the total paid, and a shorter term can do the reverse.
- Equity access. Cash-out is possible at lower leverage than a purchase, with a cash cap on the largest lanes.
- A chance to re-sort the loan. If the new balance lands under your county's conforming limit, it could be underwritten as conforming. That is a question to ask, not a promise. FHFA sets those limits each year, and they differ by county.
Taxes and homeowner's insurance carry through a refinance unchanged, per the same handout. Only principal and interest move.
The costs and the cancel window are the trade for all that flexibility. A refinance brings a new Loan Estimate and a new set of settlement charges. On a refinance of your primary home, you also get a short window to cancel after signing. The CFPB explains the right of rescission: three business days, which start only after you sign, get the disclosure, and receive the notice. You request it in writing. A recast is not a new loan, so the window does not apply.
One more point on the home itself. Occupancy changes the leverage. Primary homes, second homes, and investment properties each carry their own leverage on a given lane. This article assumes the home you live in.
How a Refinance Treats Your RSU Income
If you need stock pay to qualify, expect paperwork. The agency framework is a useful reference even when a jumbo investor sets its own overlays. Fannie Mae's Selling Guide treats RSUs as eligible income and asks the lender to document several things:
- A verification of employment showing distributions, or a recent paystub plus two years of W-2s.
- Evidence that the stock is publicly traded.
- The current vesting schedule, past and future.
- Statements showing you received earlier distributions.
- For income paid in shares, a 200-day moving average of the share price. The latest vest price is not what counts.
Unvested shares are not income. Only vested, distributed shares count, and they need documented history. Jumbo investors set their own standards, so a lender's history requirement may be longer or shorter than the agency's. Ask early.
Two cases deserve a flag. If your employer recently went public, history from before the listing may not count. And if you plan to leave the company, ask how that affects the file.
Lendmire's team sees this pattern often on files with heavy equity pay. The income is real, but the file stalls when vesting schedules and brokerage statements do not line up. Gathering the vesting schedule, statements, and two years of tax documents before you apply keeps the file clean. A recast sidesteps all of it.
Does Your Jumbo Allow a Recast?
Do not assume. Eligibility depends on the servicer and the holder. Generally, jumbo and portfolio loans are discretionary, and government-backed loans typically cannot be recast. Call your servicer and ask:
1. Can this loan be recast at all?
2. What is the minimum lump sum?
3. What is the fee?
4. Must the loan be current?
5. Is there a waiting period after origination, or a limit on how often I can recast?
6. Do I send the money as principal-only, and when does the new payment start?
If the answer is no, your options are a refinance, extra principal payments, or leaving the loan alone.
Decision Matrix for Equity-Pay Situations
| Your situation | Starting point |
|---|---|
| One large vest, loan structure is fine | Recast, if allowed |
| Servicer refuses recasts | Refinance, or extra principal |
| Want to change structure or term | Refinance |
| Short or uncertain vest history | Recast leans ahead |
| Steady quarterly vests, strong history | Either; compare costs |
| Layoff worry, thin cash cushion | Keep cash liquid first |
| Payment is far too heavy for take-home | Recast, or refinance with a longer term |
| Want cash out for another goal | Refinance |
This is a starting point. Your file may point somewhere else.
The Third Option: Extra Principal Only
Making extra principal payments without a recast is the quiet third path. The payment stays the same and the loan pays off sooner. A recast changes the required payment. Extra principal does not. If you want flexibility, extra principal keeps your options open because the required payment does not rise or fall, and you can stop whenever you like. If you want relief in monthly cash flow, only a recast or a refinance delivers it.
Then there is the fourth option: keep the shares. Stock concentration is its own risk, and paying down a mortgage is a guaranteed use of the cash in a way that holding shares is not. A financial professional can weigh that tradeoff. A mortgage broker cannot.
Timing, Sequencing, and Mistakes
Recast now and refinance later is a legitimate sequence. A recast lowers the payment today. If a new loan makes sense down the road, you can refinance then. The catch is that a smaller balance may change which lane you fit, so ask about that before you send money.
Align the move with your vest calendar. Check for blackout windows before you plan the lump sum. Confirm net cash after withholding.
Common mistakes:
- Assuming eligibility. Confirm the recast with the servicer before you move cash.
- Using headline vest value. Plan from net proceeds.
- Draining liquidity. Keep a cushion that fits your job risk.
- Counting unvested shares. They do not count for a refinance.
- Forgetting the tax side. Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Key Terms Defined
Recast: A lump-sum principal payment followed by a re-calculation of your payment over the remaining term.
Curtailment: The lump-sum principal payment that triggers a recast.
Refinance: A new mortgage that pays off the current one.
RSU: A restricted stock unit, a promise of company shares that vest over time.
Vesting: The point when shares become yours.
Jumbo loan: A loan above the conforming limit for the home's county.
Amortization: The schedule that spreads principal and interest across the loan term.
The Balanced Verdict
Neither option wins on its own. A recast wins on simplicity, and a refinance wins on flexibility. If your loan is fine, your servicer allows it, and your priority is a smaller required payment, a recast is hard to beat. If you need a different loan, a recast is not available, or you want equity out, a refinance is the better fit.
The tech-specific twist is variable income. A recast skips that question. A refinance has to answer it. Neither choice is irreversible in the same way, though: a recast can't be undone, while a refinance can be cancelled in the first days and replaced again later.
If you are weighing a refinance and want the break-even run on your own numbers, Lendmire can help you compare the programs on the same home.
Frequently Asked Questions
Can I recast a jumbo loan?
Sometimes. It depends on your servicer and the holder of the loan, and jumbo and portfolio loans are generally discretionary. Government-backed loans typically cannot be recast. Call your servicer and ask directly.
Does a recast need a credit check or appraisal?
Generally not. The borrower was already qualified on the original loan amount. Policies vary by servicer, so confirm with yours. A refinance, by contrast, re-checks income, assets, credit, and the property.
Will a recast shorten my loan term or change my interest rate?
No. The rate and payoff date stay as they were. Only the monthly principal-and-interest payment changes. If you want a different term, that is a refinance.
Does RSU income count for a refinance?
It can count. The agency framework treats vested, distributed RSUs as eligible income with documented history and a share-price average. Unvested shares do not count. Jumbo lenders set their own standards, subject to lender guidelines and full file review.
Can I recast now and refinance later?
Yes, that sequence is possible. Ask first how the smaller balance affects which loan lane you would fit later. Nothing here is a commitment to lend.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your home or investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Fannie Mae Loan Delivery Job Aid: Recast Loan Overview
3. FHFA: Conforming loan limit values
4. CFPB: Right of rescission after you sign
5. Fannie Mae Selling Guide: RSU and Restricted Stock Employment Income
This article is part of Lendmire’s jumbo loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Get a Jumbo Cash-Out Refinance on a Paid-Off Home · Should a Jumbo Borrower Cut a Cash-Out Refinance to Fit Conforming? · 4 Myths About the Risk of a Jumbo Cash-Out Refinance
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.