Real Estate Terms
Click on a link below for
an alphabetized list of Real Estate and Mortgage Terms.
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Negative amortization
Some adjustable rate mortgages allow the interest rate to fluctuate independently
of a required minimum payment. If a borrower makes the minimum payment it may
not cover all of the interest that would normally be due at the current interest
rate. In essence, the borrower is deferring the interest payment, which is
why this is called "deferred interest." The deferred interest is
added to the balance of the loan and the loan balance grows larger instead
of smaller, which is called negative amortization.
No cash-out refinance
A refinance transaction which is not intended to put cash in the hand of the
borrower. Instead, the new balance is caculated to cover the balance due
on the current loan and any costs associated with obtaining the new mortgage.
Often referred to as a "rate and term refinance."
No-cost loan
Many lenders offer loans that you can obtain at "no cost." You should
inquire whether this means there are no "lender" costs associated
with the loan, or if it also covers the other costs you would normally have
in a purchase or refinance transactions, such as title insurance, escrow fees,
settlement fees, appraisal, recording fees, notary fees, and others. These
are fees and costs which may be associated with buying a home or obtaining
a loan, but not charged directly by the lender. Keep in mind that, like a "no-point" loan,
the interest rate will be higher than if you obtain a loan that has costs associated
with it.
Note
A legal document that obligates a borrower to repay a mortgage loan at a stated
interest rate during a specified period of time.
Note rate
The interest rate stated on a mortgage note.
No-cost loan
Almost all lenders offer loans at "no points." You will find the
interest rate on a "no points" loan is approximately a quarter percent
higher than on a loan where you pay one point.
Notice of default
A formal written notice to a borrower that a default has occurred and that
legal action may be taken. |
