Home Loan Glossary – N

Negative Amortization

When the monthly payments on a home loan do not fully cover the interest due, the outstanding balance on a mortgage increases. The shortfall that is added to the loan balance, and the act of growing rather than reducing the loan balance, is known as negative amortization.

Net Cash Flow

In reference to investment property, this is the amount of income after monthly housing expenses have been deducted from operating income. These expenses include principal and interest payments, property taxes, mortgage insurance, the cost of homeowners' association membership, various other financing payments and leasehold payments.

Net Worth

A person's net worth refers to the total value of his or her personal assets and cash after their debts and expenses have been deducted.

Non-Conforming Loan

See jumbo loan

Non-Liquid Asset

A non-liquid asset is a type of asset that cannot easily be changed into cash—for example, real estate or an art collection.

Note

This is a legal loan document that spells out the loan terms and certain rights and obligations of the borrower and lender. It requires borrowers to repay their loans at an interest rate, over an agreed upon period of time.

Note Rate

The note rate is the interest rate stated on a mortgage note.

Notice Of Default

A notice of default is a written letter to a borrower letting them know that they have defaulted on their home loan and that legal action may be taken against them.