Real Estate Glossary
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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
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
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 Maeís and
Freddie Macís 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
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.