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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