Posted on: 20th Aug, 2009 06:13 pm
when i send my mortage payment on the invoice it states principal curtailment can you explaine what that means to me
Additional payment paid directly against your mortgage loan's principal balance
Hi Guest,
Principal curtailment refers to the reduction in the principal balance due to extra payments made towards the loan. It means the payments you make in excess of the regular monthly payments are applied to the principal. Thus, if you make excess payments, the amount of interest you pay over the term of your loan is also reduced and you save quite an amount of money throughout the life of the loan.
Principal curtailment refers to the reduction in the principal balance due to extra payments made towards the loan. It means the payments you make in excess of the regular monthly payments are applied to the principal. Thus, if you make excess payments, the amount of interest you pay over the term of your loan is also reduced and you save quite an amount of money throughout the life of the loan.
Principal Curtailment – Borrowers can send extra payments to reduce their principal balance. Curtailments are not a significant contributor to prepayments.
Thanks for the info.