Mortgage Glossary
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NEGATIVE AMORTIZATION:
When the periodic payments on a loan are not sufficient to pay the interest which has accumulated during the previous period resulting in an increase rather than a decrease in the amount owing on the mortgage.
NEGATIVE AMORTIZATION CAP:
A limit, expressed as a percentage of the principal, of the negative amortization allowed under a variable or adjustable rate mortgage.
NEGOTIABLE RATE MORTGAGE:
See adjustable rate mortgage or variable rate mortgage.
NO CASH-OUT REFINANCE:
The replacement of a matured loan with a new loan where no additional principal is borrowed and added to the loan.
NO CHANGE SCENARIO:
A method of calculating the future payments required under a variable or adjustable rate mortgage on the assumption that the index (and therefore the interest chargeable on the mortgage) will not change.
NOMINAL LOAN RATE:
The interest rate stated on the loan agreement.
NON-ASSUMPTION CLAUSE:
A term of a mortgage contract that forbids the transfer of the mortgage to a new owner without prior consent of the lender.
NONDISTURBANCE CLAUSE:
A term of a mortgage which guarantees that leases regarding the subject property will be allowed to continue uninterrupted in the event of mortgage default.
NOTE:
A written instrument of indebtedness, promising to pay a certain person a particular sum of money upon stated terms.
NOTE RATE:
The interest rate as set out in the mortgage/loan contract.
NOTICE OF DEFAULT:
The written notice sent by a lender to a borrower stating that the borrower has not met his obligations under the loan contract and the lender may take legal action to enforce the agreement.
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