Negative Amortization
Occurs when your monthly payments are not large enough to pay all the
interest due on the loan. This unpaid interest is added to the unpaid
balance of the loan. The danger of negative amortization is that the
home buyer ends up owing more than the original amount of the loan.
Net Effective Income
The borrower's gross income minus federal income tax.
Non Assumption Clause
A statement in a mortgage contract forbidding the assumption of
the mortgage without the prior approval of the lender. Note: The signed
obligation to pay a debt, as a mortgage note.
Note
A written agreement containing a promise of the signer to pay to
a named person, or order, or bearer, a definite sum of money at a
specified date or on demand.
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