Negative Amortization
Negative amortization occurs when monthly payments tail to cover the interest cost. The interest that isn’t covered is added to the unpaid principal balance, which means that even after several payments you could owe more than you did at the beginning of the loan. Negative amortization can occur when an ARM has a payment cap that results in monthly payments that aren’t high enough to cover the interest.
Net
After taxes.
Net Effective Income
Gross income minus federal income tax.
Non-Assumption Clause
A statement in a mortgage contract forbidding the assumption of the mortgage by another borrower without the prior approval of the lender.
Non-Dischargeable Debt
Debt, such as taxes, that cannot be forgiven in bankruptcy liquidation.
Note
Legal document stating the terms of a debt and a promise to repay it.
Notice of Default
Written notice to a borrower that default has occurred and that legal action may be taken.