What does curtailment mean in mortgage?

Mortgage curtailment is a reduced mortgage payment option for qualified homeowners who want to support their local economy by helping to stimulate growth in the areas they reside in. If you are a homeowner who is struggling to pay your mortgage, you may be eligible for a mortgage curtailment. A mortgage curtailment is an option for homeowners who owe more on their mortgage than what their home is worth.

What does curtailment mean in mortgages?

If you take out a 30-year fixed or fixed-rate mortgage it will likely have a ceiling on the amount you will owe each month. For example, if your mortgage payment is $1,500, that amount will be the maximum you will owe each month. If your mortgage balance is higher than the amount you owe each month, your bank will periodically reevaluate your payment to ensure that you will still be able to afford it.

What is mortgage curtailment?

When you refinance your mortgage you can often get a lower interest rate if you have a larger mortgage. However, that typically comes at a cost. When taking out a larger mortgage, you will have to pay for mortgage insurance. It’s basically a small fee paid by the lender to the mortgage insurer to protect the lender if you default on your mortgage.

What is curtailment in mortgages?

Every lender has a different policy on how they handle mortgage curtailment. Some will offer a slight rate reduction if you refinance, but the reality is that few lenders are willing to offer an immediate mortgage refinance in the first place.

What does a mortgage curtailment mean?

A mortgage curtailment is a way for you to reduce or eliminate your monthly mortgage payments for a fixed period of time. If you have a mortgage that you can't afford to pay each month, you can ask your lender if they offer a mortgage curtailment. You can also consider a mortgage loan modification or a short sale to get out of your current mortgage and have no payments.