How We Bought First and Recast Later: A Smart Strategy That Helped My Clients Save $1,300/Month

Discover how Lancaster County buyers used a 5% down conventional loan and mortgage recasting to buy first, avoid contingencies, and reduce their monthly payments by over $1,300/month—without refinancing.

A few months ago, I worked with a couple relocating within Lancaster County who needed more space for their growing family. They found the perfect home in Hempfield School District—plenty of yard, extra bedrooms, and in a quiet cul-de-sac. The only problem? They hadn’t yet sold their current home.

Like many homebuyers in today’s competitive Lancaster PA real estate market, they didn’t want to risk losing the home they loved while waiting for their current house to sell. We knew that submitting a contingent offer—one dependent on selling their existing home—would make them far less competitive. The sellers had multiple offers already, and we had to act fast.

The Strategy: Buy First with 5% Down, Recast Later

Here’s how we made it work:

They secured the home with a 5% down conventional loan—just $20,000 upfront on a $400,000 purchase price. This gave them the ability to close quickly and without contingencies, which the seller loved.

Their initial loan was:

• Loan amount: $380,000

• Interest rate: 7%

• Term: 30 years

• Monthly principal & interest: $2,528

It wasn’t ideal to carry that payment along with their old mortgage, but we had a plan.

Within six weeks, they sold their previous home and netted $200,000 in proceeds. Rather than refinance (which would have meant new closing costs, a new rate, and starting the loan clock over), we helped them recast their mortgage.

They made a $200,000 lump sum payment, and their lender recalculated their loan based on the new balance.

Here’s what it looked like after recasting:

• New loan balance: $180,000

• Interest rate: 7% (unchanged)

• Remaining term: 30 years

• New monthly payment: $1,196

That’s a monthly savings of $1,332—without touching the interest rate or restarting the loan. And the recast fee? Just $300.

This strategy gave them the flexibility to move first and the financial comfort afterward. It’s one of my favorite tools for helping buyers win in tight markets like Lancaster and York.

Bonus Strategy: Rent-Backs for Even Smoother Timing

In some cases, we’ll negotiate a seller rent-back or a post-settlement occupancy. This allows the sellers of your new home to stay in place for 30–60 days while they move out—making your offer more attractive, especially if they’re also buying.

On the flip side, when you’re the seller of your current home, you can negotiate a rent-back to stay a little longer after settlement, giving you more time to move into the new place without a frantic timeline or double moves.

These occupancy strategies buy you time and reduce the chance of paying for two homes at once.

What You Need to Know About Mortgage Recasting

Recasting only works with specific loan types—typically conventional loans. FHA, VA, and USDA loans usually don’t qualify. Not every lender offers it, so it’s important to connect with one who does before you close.

Also:

• Your loan must be in good standing (no missed payments)

• Most lenders require a minimum lump sum—often $5,000 to $10,000

• You may only be allowed to recast once, so make it count

Watch Out for This Pitfall: Timing & Pricing Your Current Home

While this strategy works incredibly well, it’s not without risks—and I make sure all my clients understand them upfront.

The biggest potential pitfall? Overpricing your current home. If your home sits on the market too long, you run the risk of carrying two mortgage payments for longer than expected. That pressure can lead to rushed decisions or price drops that could’ve been avoided with the right strategy from the start.

One way we reduce that risk is by closing on your new home early in the month. Why? Your first mortgage payment typically isn’t due until the second full month after closing. So if you close on June 3rd, your first full payment isn’t due until August 1st. That gives you more time to get your current home sold without double-paying.

Helping You Buy Smart in Lancaster County

As a local real estate agent based here in Lancaster and York, PA, I work with buyers like you every day who are trying to move up, relocate, or make a smart financial move. I’ll help you:

• Make a non-contingent offer that still fits your budget

• Connect with lenders that offer mortgage recasting

• Time your move to avoid double mortgage payments

• Price and market your current home so it sells smoothly

Thinking About Buying Before You Sell?

Let’s put together a strategy that helps you buy the right home, stay competitive, and keep your finances in check—without sacrificing your peace of mind.

📞 Book a quick consultation with me here
Let’s make your move smarter, not riskier.