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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.

Net worth

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

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.

No Doc Loan

These loans are designed for those who do not wish to disclose or verify their income. The following is not stated in the application: Employment, Income, or Assets. The down payment can come from anywhere and does not need to be the borrowers’ own money. The down payment for purchases must be a minimum of 10%. This type of loan is very popular among independent contractors or people with several sources of income. Typically, these loans require a half point to a full point and a half above a standard rate.

No Income No Asset Loan (NINA)

A type of reduced documentation mortgage program in which no income and no assets are disclosed on the loan application, but employment is verified. NINA loans usually fall into the Alt-A classification, and may carry a higher interest rate than a prime mortgage.

No Income Verification Loan (NIV)

This feature eliminates the need to verify earned income, although assets and unearned income must still be verified.

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.

Non Owner Occupied

A classification used in mortgage origination, risk-based pricing and housing statistics for one to four-unit investment properties. The property is not occupied by the owner. The term non-owner occupied is not typically used for multi-family rental properties, such as apartment buildings. 

Non-liquid asset

An asset that cannot easily be converted into cash.

Non-Recurring Closing Closts

Non-recurring closing costs are those one time costs associated with the home buying and mortgage qualifying process.  These closing costs only occur once at the close of the transaction.  Typical non-recurring closing costs include Mortgage Points, Title, Escrow, Appraisal, Credit Report, Document Preparation, Property Inspection, Termite Inspection, Underwriting and other miscellaneous charges. 

Notary

A notary is a person licensed by the state to witness the signing of your loan documents. Mobile notary service is available to have you sign docs in the comfort of your own home.

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