Negative Amortization

An increase in principal balance which occurs when the monthly payments do not cover all of the interest cost. The interest cost which is not covered by the payment is added to the unpaid principal balance.

Net Effective Income

The borrower's gross income minus federal income tax.

Non Assumption Clause

A statement in a mortgage contract forbidding the assumption of the mortgage without the prior approval of the lender. Note: The signed obligation to pay a debt, as a mortgage note.

Non-conforming Loan

Loans that are above the loan limits set by FNMA and FHLMC. Also known as jumbo loans.

Nonconforming Use

A property which does not conform to the zoning of an area.

Note

A written promise to repay a certain sum of money on specified terms.