Negative Amortization
Amortization means that monthly payments are large enough to pay the interest and reduce the principal on your mortgage. 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 that even after making many payments, you could owe more than you did at the beginning of the loan. Negative amortization can occur when an ARM has a payment cap that results in monthly payments not high enough to cover the interest due.
Net Income
Your take-home pay, the amount of money that you receive in your paycheck after taxes and deductions.
Note
A legal document signed by a borrower that is an acknowledgment of the debt and an implicit promise to pay over a specific period of time for a specific sum.
Note Rate
The interest rate stated on a mortgage note.
Notice of Default
A formal written notice to a borrower that there is a default on a loan and that legal action is possible.
