Mortgage Recasting for Rental Cash flow

[Ryan Sears]

Hello all,

I am 2 weeks away from closing on my first home, which I plan to turn into a rental property after living there for about 2 years and putting in some sweat equity. Because this is my first purchase I am not making a large down payment, which will leave my monthly payments higher than they could be. In order to make up for this I am considering doing a mortgage recast a few years down the road. This would allow me to throw a large chunk of cash at the principle in turn decreasing monthly payments, reducing the amount of interest paid, and ultimately allowing the property to have better cash flow margins as a rental. I see it as a way for making up for my low down payment. What do you think of this idea? Is it worth it or would my cash be better off put towards my next deal.