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.
