Glossary - N

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Negative amortization: A gradual increase in mortgage debt that occurs when the monthly payment is not large enough to cover the entire principal and interest due. The amount of the shortfall is added to the remaining balance to create "negative" amortization.

Net cash flow: The income that remains for an investment property after the monthly operating income is reduced by the monthly housing expense, which includes principal, interest, taxes, and insurance (PITI) for the mortgage, homeowners' association dues, leasehold payments, and subordinate financing payments.

Net worth: The value of all a person's assets, including cash, minus all liabilities.

Normal wear and tear: That physical deterioration which occurs with the normal use of a property, without negligence, carelessness, accident, or abuse of the premises, equipment, or chattels by the occupant, members of the occupants household, or their guests.

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

Notice of default: A formal notice to a borrower that a default has occurred and that legal action may be taken.

Nuisance: Conduct or activity which results in an actual physical interference with another person's reasonable use or enjoyment of his/her property for any lawful purpose.