Mortgage Glossary
# A B C D E F G H I J K L M N O P Q R S T U V W X Y ZN
A mortgage loan on improved real property located outside a lending institution's normal business territory but within the United States, its territories or possessions.
Negative Amortization
The result of a mortgage repayment plan in which the borrower makes payments that amount to less than the interest due. Unpaid interest is then added to the outstanding loan balance, causing the outstanding loan balance to increase instead of decrease.
Neighborhood Housing Services Programs
Programs aimed at halting the further decline of neighborhoods that have begun to deteriorate. They are based on a partnership of community residents, lenders, and local government. NHS is administered by the Neighborhood Reinvestment Corporation.
Neighborhood Reinvestment Program
Created by the Housing and Community Development Act of 1978 to help establish locally run self-help coalitions of business leaders, residents, and local government officials, called Neighborhood Housing Services (NHS) programs, that encourage communities to revitalize depressed urban neighborhoods and thus make home financing more attractive in these areas.
Net Effective Income
A borrower's total after tax income.
Net Rentable Area
The actual square footage of a building that can be rented. Halls, lobbies, stairways, elevator shafts, maintenance areas and the like are not included.
No Cash-Out Refinance
A refinance transaction that calculates a new balance to cover the balance due on the present loan, instead of providing cash to the borrower.
No-Cost Loan
Loans offered without costs normally paid to the lender, and/or covering other purchase and refinance transactions (such as escrow fees, settlement fees, notary fees, etc.).
Non Assumption Clause
A statement in a mortgage contract that forbids assumption of the mortgage, unless the lender's approval has been obtained.
Nonconforming Loan (Jumbo Loan)
A loan exceeding Fannie Mae and Freddie Mac's loan limits.
Nonmortgage Loan
An advance of funds not secured by a real estate mortgage.
Nonperforming Loan
A loan that is not earning income and: (a) full payment of principal and interest is no longer anticipated, (b) principal or interest is 90 days or more delinquent, or (c) the maturity date has passed and payment in full has not been made.
Nonrecourse Loan
A type of loan in which the only remedy available to the lender in the event of the borrower's default is to foreclose on the collateral; the borrower is not personally liable for repayment.
Nonresidential Mortgage Loan
A mortgage loan secured by nonresidential property such as an office building, store, factory, or church.
Note
A written promise to pay a stipulated sum of money to a specified party under conditions mutually agreed upon. Also called a promissory note, promise, or bond.
Note Rate
The interest rate on a mortgage note.
Notice of Commencement
A document used in some states and recorded after a construction loan mortgage has been recorded. All mechanics' liens relate back to the date the notice of commencement was recorded, thus enabling the construction mortgage to remain a first lien, not subordinated to any labor or supplier claim for nonpayment of bills.
Notice of Completion
Legal notice recorded after completion of construction. Mechanics' liens must be filed within a specified period thereafter.
Notice of Default
Formal notice given to a borrower that a default has taken place, and of possible legal action.
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