NEGATIVE AMORTIZATION
A gradual increase in mortgage debt that occurs when
the monthly payment is not large enough to cover the entire
principal and interest due. The amount of the shortfall is added
to the remaining balance to create "negative" amortization.
NET CASH FLOW The
income that remains for an investment property after the monthly
operating income is reduced by the monthly housing expense,
which includes principal, interest, taxes, and insurance (PITI)
for the mortgage, homeowners' association dues, leasehold payments,
and subordinate financing payments.
NET WORTH The value
of all of a person's assets, including cash, minus all liabilities.
NO-CASH-OUT REFINANCE
A refinance transaction in which the new mortgage amount is
limited to the sum of the remaining balance of the existing
first mortgage, closing costs (including prepaid items), points,
the amount required to satisfy any mortgage liens that are more
than one year old (if the borrower chooses to satisfy them),
and other funds for the borrower's use (as long as the amount
does not exceed 1 percent of the principal amount of the new
mortgage).
NONLIQUID ASSET
An asset that cannot easily be converted into cash.
NOTE A legal document
that obligates a borrower to repay a mortgage loan at a stated
interest rate during a specified period of time.
NOTE RATE The interest
rate stated on a mortgage note.
NOTICE OF DEFAULT
A formal written notice to a borrower that a default has occurred
and that legal action may be taken.
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