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VWXYZnegative 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.