Skip-Payment Mortgage

DEFINITION of 'Skip-Payment Mortgage'

A mortgage program that allows the borrower to skip (not pay) a mortgage payment. Depending upon the specific lender, there is generally no charge associated with skipping a payment. However, the interest accrued over the skipped-payment period is added to the principal balance of the mortgage, and the remaining amortization schedule is recalculated in a process called "deferred interest" or "negative amortization".

BREAKING DOWN 'Skip-Payment Mortgage'

Skip-payment mortgages are not widely marketed in the United States, but they are widely available in other countries, like Canada. Some skip-payment mortgages allow the borrower to skip up to four months of consecutive payments for reasons such as family issues or sickness.

RELATED TERMS
  1. Alternative Mortgage Instrument

    A broad category of mortgages that vary from fixed-rate, fully ...
  2. Scheduled Recast

    A recalculation of the remaining amortization schedule of a mortgage ...
  3. Accelerated Amortization

    Extra payments made towards paying down a mortgage principal. ...
  4. Mortgage Accelerator

    A type of mortgage loan program popular in the United Kingdom ...
  5. CMG Plan

    A mortgage plan in which a borrower's mortgage is structured ...
  6. Level Payment Mortgage

    A type of mortgage that requires the same dollar payment each ...
Related Articles
  1. Investing

    Understanding the Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
  2. Personal Finance

    Mortgage Amortization Strategies

    Should you get a 30-year mortgage? A 15-year one? Ways to decide which mortgage is the best fit.
  3. Investing

    Be Mortgage-Free Faster

    Getting rid of this debt faster has bigger benefits than you might think.
  4. Personal Finance

    Mortgage Basics: The Amortization Schedule

    By Lisa SmithThe amortization schedule for a residential mortgage is a table that provides a breakdown of the schedule of payments from the loan's first required payment to the loan's final payment. ...
  5. Investing

    Make A Risk-Based Mortgage Decision

    Find out how to choose which mortgage style is right for you.
  6. Personal Finance

    Shopping for a mortgage in 2016? Use this tool first.

    As home-buying technology has progressed, the process of finding the best mortgages rates for 2016 can all be done online.
  7. Personal Finance

    Shopping for a mortgage in 2016? Use this tool first.

    As home-buying technology has progressed, the process of finding the best mortgages rates for 2016 can all be done online.
  8. Investing

    Score a Cheap Mortgage

    Hidden costs can create what looks like a good deal. Find out how to find the best mortgage possible.
  9. Retirement

    Additional Streams of Income for Seniors

    Find out how a reverse mortgage can work in your favor during retirement.
  10. Personal Finance

    Understanding The Mortgage Payment Structure

    While a mortgage’s size and term set the baseline, the interest, taxes and insurance all influence the amount of the monthly payment.
RELATED FAQS
  1. What are the pros and cons of a simple-interest mortgage?

    Learn the difference between a simple interest mortgage and a standard mortgage, along with their relative advantages and ... Read Answer >>
  2. What is the process to take over a mortgage through a loan assumption?

    My landlord wants me to take over her mortgage.  ... Read Answer >>
  3. Why does the majority of my mortgage payment start out as interest and gradually ...

    When you make a mortgage payment, the amount paid is a combination of an interest charge and principal repayment. Over the ... Read Answer >>
  4. What are the different types of subprime mortgages?

    Clarify your understanding of subprime mortgages. Learn about the different types, how they work and when they might be beneficial. Read Answer >>
  5. What’s the difference between a mortgage lender and a mortgage servicer?

    Buying a home is an exciting and confusing process. Once the loan is secured, it's important to know who gets the payment: ... Read Answer >>
  6. If my mortgage lender goes bankrupt, do I still have to pay my mortgage?

    Yes, if your mortgage lender goes bankrupt you do still need to pay your mortgage obligation. Sorry to disappoint, but there ... Read Answer >>
Trading Center