Definition
Loan with no payments required during specified period, used for down payment and closing cost assistance.
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Deferred loans allow buyers to improve financial position before repayment. Loans typically become due if property is sold or refinanced. Interest rates are typically low or zero. Deferred loans improve cash flow during early ownership.
Pro Tip
Deferred payment loans improve cash flow early in ownership; understand when repayment is due.
Example
Deferred payment loan for closing costs with no payments required for 5 years.