Recasting loan scenario

[Stephen Lynch]

Hello all,

I purchased my primary residence in 2015 which I later converted to a vacation rental (weekly in summer, monthly in the offseason). It cash flows approximately $5,000 per year or $416 a month. The mortgage is $2420 a month today. It was originally $2600 but I put 15% principal onto the loan to remove the PMI.

My mortgage broker has advised me for $300 they can recast the loan and my new payment would be $2100 (PITI). Should I recast my loan to improve cash flow or continue the higher payments and increasing the equity?

I'm leaning towards the recasting option because then I could rent it monthly for around $2400 and make $300 cash flow per month but with a lot less work and wear & tear on the property. The flip side is that I would obviously be paying the loan off in 26 years vs. 19 years (at current non-recasted payment rate).

What would you do?