As part of your Skylight Lending loan, your monthly payment amount may change after the certain amount of time, this process is called re-amortization. Below is a full explanation of how this works and what can you expect as a borrower with this process.
What Is Re-Amortization?
Re-amortization is the recalculation of your monthly loan payment based on the remaining balance of your loan. It happens automatically 18 months after your Loan Start Date, which we refer to as the Re-amortization Date.
Key Terms to Know
- Re-amortization Date: 18 months after the Loan Start Date, when your monthly payment is recalculated. This date will be informed in your Loan Agreement and also in your Closing Certificate. We recommend to always follows the date stated on your Closing Certificate due to this will be the dates that the system it will be taking.
Where can I find this Re-amortization date on my documents?
You can check the information about this re-amortization date on your Closing Certificate on this part of your documentClick to show a preview of the document
- Principal Target Balance: 70% of your original loan amount, excluding closing costs. This is the balance your loan aims to reach by month 18.
Where can I find the Principal Balance target?
You can find your principal balance target on your Loan Agreement on this part:Click to show a preview of the document
- Initial Monthly Payment: Your payment amount during the first 17 months of the loan.
Where can I find this Initial Monthly Payment on my documents?
You can check the information about this Initial Monthly Payment on your Closing Certificate on this part of your documentClick to show a preview of the document
- Adjusted Monthly Payment: Your new monthly payment amount starting after the re-amortization date.
- Maturity Date: The date when your loan is scheduled to be fully paid off.
What Happens After 18 Months?
| Payment Status After Month 18 | What Happens |
|---|---|
| No voluntary prepayments on the balance (Additional payments on top of regular payments) | Monthly Regular Payment will increase to amount stated in Loan Closing Certificate |
| Voluntary Prepayments done - Balance matches Principal Target | Your monthly payment remains the same or close to the original amount. |
| Voluntary Prepayments done - Balance is higher than Principal Target | Monthly Regular Payment will increase somewhere between current payment and adjusted payment in Loan Closing Certificate |
| Voluntary Prepayments done - Balance is higher than Principal Target | Your new payment may be lower than originally estimated, but it will not go below $40/month. |
Note: If your recalculated monthly payment falls below $40, it will be set to $40 and your loan may pay off early. All scenarios assume that the loan is current and not in default.