Glossary – N

A B C D E F G H I J K L M N O P Q R S T U V W XYZ

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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.

Net Lease
A lease wherein payments to the lessor do not include insurance and maintenance, which are paid separately by the lessee.

Net sales
Gross sales minus returns and allowances.

Net worth
Excess of assets over debt.

Niche
Particular specialty in which a firm has gained a large market share.

Non Assumption Clause
A statement in a mortgage contract forbidding the assumption of the mortgage without the prior approval of the lender.

Non-Farm Payroll
The non-farm payroll figure is a component of total civilian employment and measures the number of people employed in all activities except agriculture.

Non-Recourse Loan
In a leveraged lease, the lenders cannot look to the lessor for repayment. The lender’s only recourse is to the lessee and, therefore, the lessee’s credit rating is of prime importance.

Note
A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.