Curtailment

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.