Definition
Loan deferment allows you to temporarily postpone or move missed mortgage payments to the end of your loan term. You must demonstrate financial hardship to qualify.
Understanding Loan Deferment
Loan deferment can come up when homeowners face temporary financial hardship. It lets borrowers pause payments for a set time, often during job loss or unexpected expenses. This flexibility helps manage finances without immediate penalties. Example: If you defer a $1,000 monthly payment for three months, you might add $3,000 to the end of your loan term. It's not a way to reduce your loan amount or interest. Instead, it offers breathing room during tough times. Remember, interest may still accumulate during deferment, so it's important to understand how it affects your overall loan balance.
