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Negative amortization
With some mortgages, it is possible to have a payment calculated such that the principal and interest total up to less than the amount that you would normally pay for a self-amortizing loan. In this situation, since your payment does not cover the principal and interest, the amount that you are short is still yet to be paid and can accumulate more interest than would normally be accumulated. Therefore the balance you owe does not decrease as much, and the total amount you will pay for the loan will be more than for a self-amortizing loan. In essence you are financing additional interest.
Negative Amortization
Increase in principal balance that occurs when monthly payments are not large enough to pay all interest incurred on a loan, usually caused when payment caps prevent sufficient payment increases. Deferred interest is added to the loan balance, resulting in the borrower owing more than the original amount of the loan.
Net
After taxes.
Net Effective Income
Gross income minus federal income tax.
Net worth
Your net worth is the value of your holdings after your liabilities are satisfied. For example, let us say you own one home already valued at $100,000. You still owe $80,000, you have $5,000 in loans and credit cards, and you have $25,000 in the bank. Your net worth is $25,000 + $100,000 - $80,000 - $5,000, or $40,000.
Non Assumption Clause
A statement in a mortgage contract forbidding the assumption of the mortgage by another borrower without the prior approval of the lender.
Nondischargeable Debt
Debt, such as taxes, that cannot be forgiven in a bankruptcy liquidation.
Note
Legal document stating the terms of a debt and a promise to repay it.
Notice of Default
Written notice to a borrower that a default has occurred and that legal action may be taken.