Real Estate Glossary "N"

Negative Amortization - An increase in the outstanding balance of a mortgage that occurs when the monthly payment is not large enough to cover the 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.

No Closing Cost Loan - A loan in which the fees the borrower(s) are not required to pay cash out-of-pocket at closing for the normal closing costs. The lender typically includes the closing costs in the principal balance or charges a higher interest rate than for a loan with closing costs to cover the advance of closing costs.

Net Worth - The value of all of a person's assets, including cash, minus all liabilities.

Non-Conforming Loan - See jumbo loan.

Non-Liquid Asset - An asset that cannot easily be converted into cash.

"No Out Of Pocket Cost" Loan - A loan in which the fees the borrower(s) are not required to pay cash out-of-pocket at closing for the normal closing costs. The lender typically includes the closing costs in the principal balance or charges a higher interest rate than for a loan with closing costs to cover the advance of closing costs.

Notary - An official authorized by law to attest and certify certain documents by his or her hand and official seal.

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.