Back to Glossary
Curtailment
Updated
January 19, 2023
Curtailment is the act of restricting, reducing, or shortening something. The term is frequently used in business announcements and has various applications in the mortgage industry: When a homeowner pays off the balance of a mortgage loan ahead of time, the debt may be discharged by curtailment. A mortgage principal curtailment occurs when a borrower makes an additional payment against the principal owing in order to lower the remaining balance. This is known as a partial curtailment. A total mortgage curtailment occurs when the loan balance is paid off in one single sum ahead of time.
Related Topics
Payment and Debt Ratios
Home Value: Appraised, Estimated, Actual
How Much of a Mortgage Payment Goes to Principal
What Do Underwriters Do?
What Does Loan Underwriting Mean
Loan To Value and Down Payments
What is Underwriting in Real Estate?
Homeowner's Guide: DIY Home Improvement