Glossary of commonly used terms and phrases

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Negative Amortization - (Also called 'Deferred Interest'). If the payments are too small to cover the interest due on a loan, the remaining interest owed is added to the outstanding loan balance, causing negative amortization.
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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.
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Net Effective Income - Gross income less federal income tax.
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Net Operating Income - Gross income less vacancy and collection loss, operating expenses and replacement reserves. (NOI)
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Net Proceeds - The amount of cash received from the sale of the property, not including relevant expenses.
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Net Worth -The value of all assets, including cash, less total liabilities.
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Niche Lender - A specialized lender that offers particular products to make loans to borrowers.
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Niche Lenders - Specialized lenders that offer particular products to make loans to borrowers.
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NINA (no income no assets) - This is a type of loan documentation used when borrower's do not wish to disclose income or assets, usually due to the complexity of the borrowers income.
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No Cash-out Refinance or Rate and Term Refinancing - A refinance transaction in which the new mortgage amount is limited to the sum of the remaining balance of the existing first mortgage, closing costs (including prepaid items), points, the amount required to satisfy any mortgage liens that are more than one year old (if the borrower chooses to satisfy them). No cash in hand allowed beyond 1% of loan amount.
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No Income Verification (no-doc) - A loan that requires little to no income verification.
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Non-Arms Length Transaction - When parties involved in a real estate transaction have some relationship with one another. ie; the borrower works for the lender.
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Non-Assumption Clause - A mortgage clause prohibiting the transfer of a mortgage to another borrower without the approval of the lender.
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Non-Conforming Loan - Also called a jumbo loan. Conventional home mortgages not eligible for sale and delivery to either Fannie Mae (FNMA) or Freddie Mac (FHLMC) because borrower or property do not meet underwriting guidelines. Non-conforming loans usually incur a rate and origination fee premium. The current non-conforming loan limit is $252,700 and above.
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Non-Liquid Asset - An asset that cannot easily be converted into cash.
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Non-Owner Occupant - Investment ownership in which a tenant, and not the owner, occupies the property.
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Non-recourse - A loan that is secured by collateral, usually property. If the borrower defaults, then the issuer can seize the collateral, and the borrower is not personally liable.
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Nonbearing Wall - Any wall that separates areas, but is not a weight bearing wall, such as the outer walls.
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Nonexclusive Listing - When a real estate broker has an exclusive listing, but the owner can sell his property without an agent and not be liable to pay a commission. This is also called an agency agreement.
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Notarization - When a Notary Public certifies that someone signing a document has been properly identified. The content of the document is not certified, just the signature.
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Note - A written agreement containing a promise of the signer to pay to a named person, or order, or bearer, a definite sum of money at a specified date or on demand.
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Note Rate - The interest rate stated on a mortgage note.
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Notice of Cessation - Concerning a construction project, a notice given that work has stopped. This is done to accelerate the period for filing a mechanic’s lien.
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Notice of Default (NOD) - A formal written notice to a borrower that a default has occurred and that legal action may be taken.
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Notorious Possession - A requirement for adverse possession, which is so open that it is assumed that the owner has notice of the possession.
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Nuncupative Will - A will given orally, usually in a deathbed situation, before witnesses who later testify to its authenticity.
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