Definition: Hold the Payment refers to a mortgage feature that allows borrowers to temporarily suspend their regular mortgage payments without facing penalties. This option is typically offered by some lenders to accommodate unforeseen financial hardships, like job loss or emergency expenses.

Key Points:

• Temporary suspension: This feature lets borrowers defer one or more payments, usually with lender approval and under specific conditions.
• Accrued interest: Although the borrower doesn’t make payments during this period, interest on the loan continues to accumulate, potentially extending the amortization period or increasing future payments.
• Eligibility requirements: Not all mortgages offer a payment hold, and eligibility depends on the lender’s criteria and the borrower’s financial history.

Example: If a homeowner faces unexpected expenses and has a “hold the payment” feature, they may defer one month’s mortgage payment, with accrued interest added to future payments once they resume their regular schedule.

Last modified: November 5, 2024