glossary - N
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Mid-Island Mortgage Corp. understands that the mortgage process is filled with phrases and terms that may be confusing and unfamiliar to those new to buying a home as well as those who have purchased and refinanced their homes in the past. We've provided a glossary to help clear away some of the mystery associated with the mortgage process.
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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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