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Mortgage recasts, escrow fixes, tax appeals, and home cost math.
Owning a home means a steady stream of letters from your mortgage servicer and your county assessor, most of which deserve more scrutiny than they get. I have learned to treat every one of them as a math problem first. The escrow shortage notice, the assessment increase, the refinance offer: each one has a right answer, and the right answer is usually findable in ten minutes.
Start with the mortgage itself. If you come into a lump sum, say a $40,000 bonus or an inheritance, recasting is the option almost nobody mentions. You pay the lump sum toward principal, the lender recalculates your payment on the lower balance, and your rate and term stay the same. On a $320,000 balance at 6.5 percent, a $40,000 recast drops the monthly payment by roughly $250 and saves about $50,000 in lifetime interest, for a $250 processing fee. Compare that against refinancing, which resets your term and costs thousands in closing costs, before you decide.
Property tax assessments are the other place homeowners leave money on the table. Assessments are mass appraisals, and they are wrong often enough that appeals succeed regularly. If your $380,000 assessment should be $340,000 and your local rate is 1.8 percent, that is $720 a year back in your pocket for filing one appeal. The appeal calculator estimates your savings so you can decide whether the paperwork is worth it. It usually is.
And when the escrow shortage letter arrives, and it will, do not just accept the higher payment. You generally have two choices: pay the shortage as a lump sum or spread it over 12 months. The escrow calculator models both so you can pick based on your cash position instead of your servicer's default.
One habit worth adopting: put a yearly mortgage checkup on your calendar every January. Run the recast comparison if a bonus landed, check your assessment the week notices go out, and actually read the escrow statement instead of filing it. Thirty minutes once a year catches the overcharges and missed opportunities that quietly cost homeowners thousands over a decade.
Compare recasting vs refinancing vs extra payments on your mortgage.
Open the tool →Your escrow went up? Model lump-sum vs spread repayment options.
Open the tool →Estimate savings from appealing your property tax assessment.
Open the tool →Simplified vs actual home office deduction, side by side.
Open the tool →Recasting wins when you are happy with your current rate and just want a lower payment after a lump sum. It costs around $250, keeps your rate and term, and takes weeks. Refinancing wins when rates have dropped at least 0.75 to 1 percent below yours. The recast calculator compares all three paths: recast, refinance, and extra payments.
If comparable homes are selling below your assessed value, probably yes. A successful appeal lowering a $380,000 assessment to $340,000 at a 1.8 percent rate saves $720 every year. Most jurisdictions let you file with comparable sales data and decide within months. The appeal calculator tells you the dollar stakes before you start.
You can usually pay the shortage in one lump sum or spread it across 12 months of higher payments. Lump sum avoids the payment shock; spreading preserves cash. Check whether your servicer also raised the monthly cushion, which is a separate increase from the shortage itself.