Definitions for **"Deferred Interest"**

Occurs when your monthly payments are not large enough to pay all the interest due on the loan. This unpaid interest is added to the unpaid principal balance of the loan. Also called negative amortization. The danger of negative amortization is that the homebuyer ends up owing more than the original amount of the loan.

When the monthly payments do not cover all of the interest cost, the unpaid interest is deferred by adding it to the loan balance.

MP] Same as Negative Amortization.

An old type of loan whereby some or all of the interest owed by the borrower is not collected immediately but is added to the amount outstanding. Due to this it is likely that the borrower will end up owing a lot more than originally borrowed.

Deferred interest is when the monthly payment does not cover the interest owed and the unpaid interest is added to the unpaid balance of the loan. In some cases a borrower could owe more than the original amount borrowed. This is also called negative amortization.

I interest is deferred or delayed by adding it to the loan balance.

Interest payments that are delayed while a borrower is not gainfully employed; when the borrower again becomes a wage earner, the interest payments are resumed. This benefit is generally characteristic of federal and state guaranteed student loans.

Accrued but unpaid interest, occurring with Adjustable Rate Mortgage loans when a payment remittance does not cover the full amount of interest due for a given period.

Interest on which payments are delayed for the borrower and paid at a later date. Such deferred (accrued) interest may be capitalized.

Interest payments that are postponed for the borrower and paid at a later date.

Deferred Interest or Negative Amortization takes place when your monthly repayment towards a loan is not enough to meet the interests due on the loan, and eventually gets added to the original balance of the loan. This is dangerous because the borrower at the ends is obligated to pay a greater amount than he actually borrowed.

Accrued interest on which payment is delayed.

Occurs whenever the scheduled payments are not sufficient to cover the interest due on the loan. The difference between the interest owed and the interest paid each month is added to the principal, resulting in an increase in the unpaid principal balance of the loan. This is usually associated with a graduated payment mortgage or a monthly adjustable rate mortgage.

when the monthly payment is not sufficient to cover the monthly interest on the loan, the difference is added to the principal balance.

Amount added to the balance of a loan when monthly payments are insufficient to cover the interest incurred. This results in negative amortization.

When a mortgage is written with a monthly payment that is less than required to satisfy the note rate, the unpaid interest is deferred by adding it to the loan balance. See negative amortization.

Interest payments that are delayed for the borrower during a specified period and paid at a later time.

Interest payments that are delayed while a borrower is not gainfully employed, as, for example, when the borrower is a student. This benefit is generally characteristic of federal and state guaranteed student loans.

Deferring unpaid interest by adding it to the loan balance; occurs when a mortgageâ€(tm)s monthly payment is less than adequate to cover the note rate (see negative amortization).

Interest which is not paid as it accumulates but which is added, instead, to the loan principle.

Interest added to the balance of a loan when monthly payments are not sufficient to cover it. (See negative amortization.)

Unpaid interest added to the loan balance.

When monthly mortgage payments do not cover all the interest due, the interest not covered is added to the unpaid principal balance. This is also referred to as negative amortization.

Interest that accrues, but on which payment is delayed until a later date. Such deferred (accrued) interest may be capitalized.

Interest is deferred on an ARM when a minimum monthly payment is not large enough to pay all the interest that has accrued on the loan for that period. The unpaid interest is added to the outstanding principal balance to be repaid over the remaining life of the loan. To avoid deferred interest, a borrower sometimes has the option of making a larger payment that includes what would otherwise become deferred interest.

See Negative Amortization below.

Interest owed on money borrowed is paid at a later date. This leads to an increase in the total owed, but can be a useful way of financing short term debt.

A mortgage where the monthly payments are insufficient to satisfy the note rate and unpaid interest is deferred by adding it to the loan balance. See negative amortization

A type of loan where some or all of the interest owed by the borrower is added to the amount outstanding which therefore causes the borrower to owe much more than originally borrowed.

When the amount of interest a borrower is required to pay on a mortgage loan is less than the amount of interest accrued on the outstanding principal balance. This amount is usually added to the outstanding principal balance of the mortgage loan.

Occurs when your monthly payments are not large enough to pay all the interest due on the loan. This unpaid interest is added to the unpaid balance of the loan. The danger of deffering your interest is that the buyer ends up owing more than the original amount of the loan. Also called Negative Amortization.

Interest payments that are delayed with approval of the lender. For example, interest can be deferred while a borrower is not gainfully employed. When the borrower becomes a wage earner, the interest payment obligation resumes.

Interest on a mortgage which is delayed because the monthly payment of the mortgage is not large enough to cover the entire principal and interest due, and therefore is added to the loan balance See "negative amortization"

Interest that is deferred and added to the loan balance as a result of a mortgage with monthly payments less than what is required to satisfy the note rate. See also Negative Amortization.