Arbor Financial Group Marketing Engines, Inc.

Glossary of Terms

Mortgage. Real Estate & Insurance

N

NATIONAL NOTARY ASSOCIATION
An association that sends out necessary application materials and supplies to initiate one's notary commission.
NEGATIVE AMORTIZATION
Amortization means that monthly payments are large enough to pay the interest and reduce the principal on a mortgage loan by its maturity date. Negative amortization occurs when the monthly payments do not cover all of the interest cost. The interest cost that isn't covered is added to the unpaid principal balance. This means even after making many payments, a borrower may owe more than was owed at the beginning of the loan.
Negative Cash Flow
Situation in which expenditures required to maintained an investment exceed income received on the property.
Net Cash Flow
Income that remains for an investment property after the monthly operating income is reduced by the monthly housing expense (which includes PITI for the mortgage, owners' association dues, leasehold payments, and subordinate financing payments).
NET DISPOSABLE INCOME
Money left after subtracting the principal, interest, taxes and insurance and all other obligations from the monthly net income. The surplus amount the borrower has available for living expenses after housing expenses are subtracted.
NET INCOME
The difference between adjusted gross income and operating expenses. May or may not include depreciation.
NET RENTAL INCOME
The monthly gross rental income minus the monthly mortgage payments, insurance, maintenance, taxes and other miscellaneous payments.
Net Worth
Net Worth is one's assets, less one's liabilities. Liquid net worth (that which is cash or can be immediately converted to cash) is what cooperatives focus on. Value of all of a company's (or individual's) assets, including cash, less its total liabilities. It is used to indicate financial strength.
New Construction
New construction that has never been occupied.
Non-Conforming Mortgage Loan 
Mortgage loan in which the LTV ratio, the term, or other aspect of the loan exceeds permissible limits specified in regulations.
Non-Conforming Use
Permitted use of real property, even though it does not conform to current zoning laws, because it was lawfully established and maintained before the current zoning laws were in effect.
Non-Occupant Borrower - Investor 
Borrower who does not occupy the property or a unit. One who intends to hold the property for rental purposes.
Non-Realty Items
Depending on where the property is located, items such as washers, dryers, dishwashers, disposals, stoves, carpeting, draperies, window air conditioners, etc., that are included in the sale. Non-realty items that are given value on the appraisal are usually considered sales concessions.
NON-RECURRING CLOSING COSTS 
Fees and costs associated with the closing of a loan, such as title, appraisal, notary fees, etc., that occur only once in the transaction and don't recur.
NOTARY PUBLIC
One who is authorized by the state or Federal government to administer oaths and to attest to the authenticity of signatures.
NOTE
An agreement containing an expressed and absolute promise of the signer to pay to a named person or bearer a definite sum of money at a specified date or on demand. Usually provides for interest, and if concerning real property, is secured by a mortgage or trust deed.
Note Rate
Starting interest rate for an Adjustable Rate Mortgage (ARM) loan or variable-rate home equity line of credit. At the end of the effective period for the start rate, the interest rate adjusts periodically during the life of the loan based on a specified financial index.
Notice of Default
(1) Notice recorded after the occurrence of a default under a deed of trust or mortgage (NOD).
(2) A notice required by an interested third party who has insured or guaranteed a loan (MIC).
NOTICE OF RESCISSION
Borrowers' signed acknowledgement that they wish to cancel their loan. See NOTICE OF RIGHT TO CANCEL.
NOTICE OF RIGHT TO CANCEL 
Under Regulation Z, customers must be notified they are entering into a transaction that will result in a lien against their primary residence. This document explains they have the right to cancel the transaction, at no cost, within 3 business days from the date of signing the closing documents on a loan.
NOTIFICATION OF INCOMPLETENESS LETTER
A letter sent to the customer requesting additional information to continue with the loan application process.