Skip-payment privilege(redirected from Skip Payment Privilege)
A clause in some mortgage contracts allowing the borrower to skip payments if he/she is ahead of schedule on repayment or has given advance notice to the lender that the payment will be skipped. If the borrower skips a payment under the skip-payment privilege, it does not change or affect the repayment schedule, interest accumulation, or anything else. This gives the borrower some degree of flexibility if he/she has unexpectedly high expenses in a given month. The borrower can miss a payment without risking default, which is detrimental to both the lender and the borrower. It is also called a skip payment clause.