Amortization means that monthly payments are large enough to pay the interest and reduce the principal on a 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, a borrower may owe more than was owed at the beginning of the loan.
Net Effective Income
The borrower's gross income minus federal income tax.
Statements in the mortgage contract forbidding the assumption of the mortgage without the prior approval of the lender.
Also called a jumbo loan. Conventional home mortgages not eligible for sale and delivery to either Fannie Mae (FNMA) or Freddie Mac (FHLMC) because of various reasons, including loan amount, loan characteristics or underwriting guidelines. Non-conforming loans usually incur a rate and origination fee premium.The current non-conforming loan limit is ,601 and above.
A property not used as a residence by the owner of the property.
A person, designated by the state, which can certify the identity of a person when signing various documents.
Short for promissory note. This document gives the parameters of the loan and legally obligates the borrower to pay back the debt.