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Mortgage
Glossary - Mortgage and Real Estate Terms Sorted Alphabetically:
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N - negative amortized (Neg/AM), Neg AM Loans,
negative cash flow, net worth…more
NEGATIVE AMORTIZED (NEG/AM) - the unpaid interest which is added to the
mortgage principal in a loan where the principal balance increases rather than
decreases, because the monthly mortgage payments do not cover the full amount
of the interest that's due.
Option ARM mortgages have become a very popular mortgage product in
recent years which can lead to Neg Am.
NEG AM LOANS - a popular type of an
Adjustable Rate Mortgages (ARM) loan, where the initial interest rate
(start-rate) is very low, therefore monthly payments are smaller than other
type loans. These type loans have interest rates which adjust periodically, and
monthly payments which also change. There normally is a CAP, or ceiling, which
limits the amount the interest rate can go up (fully indexed), AND also a
separate limit on the size the monthly payments can increase as well. Could be
a decent fit for people with strong income 'potential', bigger home now for
less money monthly. These loans do carry a higher level of risk. Be sure to
speak with an AAXA Loan Advisor for details.
NEGATIVE CASH FLOW - the deficit that is created when expenditures required to
maintain an investment exceed income received on the property.
NET WORTH - the value of all assets including cash less total liabilities.
Often used as an underwriting guideline to indicate creditworthiness and
financial strength.
NO CASH-OUT REFINANCE (RATE & TERM RE-FI) - transaction in which the mortgage
amount is limited to the sum of the unpaid principal balance of any existing
mortgages plus closing costs. Check out our
Mortgage Refinance Section for program options.
NON-CONFORMING MORTGAGE LOAN - a residential mortgage loan in which the loan
amount, the loan-to-value ratio, the term, the credit score, or some other
aspect (or combination of characteristics) of the loan exceeds permissible
limits as specified in (GSE) agency regulations. Rates & fees are typically
higher than 'conforming' rates. These programs may include
bad credit mortgage financing options and
stated income mortgage and no doc loan programs for self-employed or
commissioned individuals.
NOTE - a general term for any kind of paper or document signed by a borrower
that is an acknowledgment of the debt and is, by inference, a promise to pay.
When the note is secured by a mortgage, it is called a mortgage note, and the
mortgagee is named as the payee.
NOTICE OF COMPLETION - notice recorded after completion of construction.
Mechanic's liens must be filed within a specific period of time thereafter.
NOTICE OF DEFAULT - notice recorded after a default under a deed of trust or
mortgage has occurred. Also, the notification sent to defaulting borrowers
required by insurers or guarantors - such as FHA, VA, or certain mortgage
insurance companies.
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A
- adjustable rate mortgage, adjustment interval, amortization, annual
percentage rate (APR)…more
B – balloon mortgage, bankruptcy, basis point, beneficiary…more
C - caps, cash flow, cash out (second mortgage), cash out refinance…more
D - debt consolidation, debt service, debt reduction plan, debt-to-income
ratio…more
E - earned and unearned income, earnest money, easement, economic life…more
F - Fair Credit Reporting Act, fair market value, Fannie Mae…more
G - good faith estimate, grace period, gradual payment mortgage (GPM),
grantee…more
H - home equity, home improvement loan, Home Mortgage Disclosure Act
(HMDA)…more
I - index, in file credit report, inflation, initial interest rate, ingress and
egress…more
L - lender buy-down mortgage, liability insurance, LIBOR, loan application…more
M - manufactured home, market value, maximum loan amount, mechanic’s lien…more
O - obsolescence, off-site improvements, on-site improvements, ordinary
income…more
P – par, partial payment, partnership, party wall, payment shock…more
Q – quality control, quit claim deed, quote…more
R – rate shopper, real property, real estate loans, reconciliation…more
S – sales contract, satisfaction or mortgage, seasoned mortgage, second
mortgage…more
T – tax lien, tenancy in common, tenant, term, title, title insurance…more
U – underwriting, unencumbered property, uniform commercial code (UCC)…more
V – VA (Department of Veterans Affairs) Mortgage, vacancy rate, VA funding
fee…more
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