GLOSSARY of American & Mexican Real Estate 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.
Net Income / Net Operating Income
Gross income less all operating expenses. Is used in the income approach to value.
Net Listing
The broker agrees to sell the property in order to achieve a net price to the owner, and anything which is received above the net price is the broker's commission. A net listing is prohibited by the licensing law in many states.
Nonconforming Use
A pre-existing use of land which does not conform to the zoning ordinance but which may legally remain.
Notary Public
A person with the authority to take oaths and acknowledgments in the United States.
Note
A signed instrument acknowledging the existence of a debt and the promise to pay.
Note Rate
The interest rate stated on a mortgage note.
Notice - Aviso
The condition of being warned.
Notice of Default
A formal written notice to a borrower that a default has occurred and that legal action may be taken.
Novation
Occurs when the person in a contract, to whom the duty was owed, expressly agrees to substitute the delegate, or new obligor, for a consideration, and agrees to discharge the old obligor from the obligations under the contract. For example, loan assumptions and cession of Rights.
Null and Void
Invalid and unenforceable.
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