What does curtailment mean on my mortgage statement?

If you’ve refinanced your mortgage in the last few years, you may have noticed an entry on your mortgage statement that says “ curtailment ” If you don’t know what it refers to, curtailment is a way to reduce the principal amount of your home loan to avoid defaulting on your mortgage.

What does curtailment mean on mortgage payment?

If you are having difficulty making your mortgage payment, you may be able to use the mortgage loan's curtailment option. The mortgage loan company will let you pay a smaller portion of your mortgage each month, in exchange for paying the balance in full by a certain date. If you do opt to use the mortgage loan's curtailment option, you will likely have to pay a penalty.

What is curtailment on home mortgage payment?

If a mortgage lender decides to decrease your monthly payments, it will usually do so by lowering the interest rate or adding a penalty to your principal. This allows you to pay off your loan faster and ensures you don’t lose your house when interest rates increase. If that happened, you’d end up owing more money than you borrowed.

What is curtailment meaning in mortgage?

When a mortgage holder decides to reduce the amount of money you owe them, they will inform you of the lower amount by adding a line to your monthly payment. The new amount is often lower than your original payment amount, but it may not be a fee. The decision to curtail is made by your lender, and each lender has different policies.

What is curtailment on a mortgage payment?

If your mortgage company decides to not renew your loan due to a low credit score or other reasons, they may offer you a new loan with a smaller loan balance. This is referred to as "curtailing" or "reducing" your mortgage. Instead of paying the full amount owed each month, you'll pay a lesser amount based on the new loan balance.