Real Estate Glossary

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Negative Amortization: Amortization means that monthly payments are large enough to pay the interest and reduce the principal on your mortgage. Negative amortization occurs when the monthly payments do not cover all of the interest cost. The interest cost that isn't covered is added to the unpaid principal balance. This means that even after making many 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 not high enough to cover the interest due. 

Negotiable: Capable of being negotiated; assignable or transferable in the ordinary course of business.

Net Listing: A price, which must be expressly agreed upon, below which the owner will not sell the property and at which the broker will not receive a commission; the broker receives the excess over and above the net listing price as commission. The broker in this type of listing will have a very hard time maintaining his fiduciary responsibilities to his seller since his interests are potentially at odds with the interests of the seller.

Net Worth: Value remaining after subtracting the liabilities from the assets of a company or an individual. 

No Cash-Out Refinance: A refinance transaction which is not intended to put cash in the hand of the borrower. Instead, the new balance is calculated to cover the balance due on the current loan and any costs associated with obtaining the new mortgage. 

No-Cost Loan: Offered by most lenders, the loan that has no cost or no points, but generally the interest rate of these loans are a bit higher.

Non-Conforming Loan: A loan that exceeds Fannie Mae’s and Freddie Mac’s loan limits, currently at $227,150. Freddie Mac and Fannie Mae loans are referred to as conforming loans.

Non-Conforming Use: A property which does not conform to the zoning of an area.

Notary Public: An official authorized by law to witness or attest to an acknowledgment by a person who has executed a legal contract.

Note: A signed written document acknowledging a debt and promising payment of a mortgage.

Note Rate: The interest rate stated on a mortgage note.

Notice of Default: A formal written notice to inform a borrower that he/she is behind in payments and that legal action may be taken. 

Notice of Non-Responsibility: A legal notice that removes responsibility of improvement costs from a property owner.

Notice of Rescission: A recorded notice to rescind a notice of default of a mortgage or deed of trust.