Negative Amortization
An increase in a mortgage loan balance that occurs when the monthly payment is too small to cover the principal and interest due. The amount of the shortfall is added to the remaining balance to be repaid later.

Negotiable Instrument
A written document that represents an unconditional promise to pay a specified amount of money upon the demand of its owner. Examples include checks and promissory notes. Negotiable instruments can be transferred from one person to another, as when you write "pay to the order of" on the back of a check and turn it over to someone else.

Net Cash Flow
The remaining income left after the collection of rent and payment of property expenses, including the mortgage, taxes, insurance and maintenance.

Net Effective Income
Gross income less federal income tax.

Net Income
This is income after taxes, deductions, and allowances have been subtracted

Net Worth
The difference between a person’s assets and liabilities.

No Cash-Out Refinance
The mortgage amount is limited to the sum of the unpaid principal balance of any existing first mortgage(s) and closing costs.

No Closing Cost Loan
A loan in which the fees the borrower(s) are not required to pay cash out-of-pocket at closing for the normal closing costs. The lender typically includes the closing costs in the principal balance or charges a higher interest rate than for a loan with closing costs to cover the advance of closing costs.

No-Documentation Loans or NO-DOC
NO-DOC means No verification of income or even job. Rates will vary depending on LTV and credit scores.

No Income Check Loan
This program is designed for the entrepreneur or self-employed that choose not to have their income revealed or just have difficulty proving their income. The rate tends to be higher on a No Income Check Loan.

Non-Dischargeable Debts
Debts that cannot be erased through bankruptcy. Examples of non-dischargeable debts include alimony, child support, many student loans, and most income tax debts.

Non-Liquid Asset
An asset that cannot easily be converted into cash.

Non-Owner-Occupied Property
Property purchased by a borrower not for a primary residence but as an investment with the intent of generating rental income, tax benefits and profitable resale.

Non-Profit Corporation
A business entity formed for civil, social, or charitable purposes for which the generation of profit is not part of its function. Non-profit corporations are taxed differently, and are incorporated differently than for-profit business organizations.

Note
A written promise by one party to pay a specified sum of money to a second party under conditions agreed upon mutually.

Note Rate
The interest rate on the mortgage loan.

Notice of Default (NOD)
A notice recorded after the occurrence of a default under a deed of trust or mortgage. Typically required by an interest third party that has insured or guaranteed the loan.