Reamortization

**Reamortization**

Reamortization is the process of recalculating the remaining balance and monthly payments on a loan, typically a mortgage, based on the current outstanding principal and remaining term. This adjustment often occurs after a significant lump-sum payment has been made or following changes in interest rates, allowing borrowers to reduce their monthly payments or shorten the loan term without refinancing. Understanding reamortization can help homeowners manage their finances more effectively and potentially save money on interest over the life of their loan.