Negative Amortization
Definition of "Negative amortization"
Increase in the outstanding loan balance arising when the mortgage payment does not fully meet the interest charge on the loan. This occurs under indexed loans or when the indexed rate change does not impact the period debt service payments. Lower monthly payments are available with negative amortization loans, and most often, borrowers who take this risk are buying in markets with extremely high prices. many gamble that their home will appreciate enough to cover the difference between their payments and the new loan amount.
Popular Real Estate Terms
The assessment sales ratio is a way of measuring the accuracy of a property’s assessed value when compared to the property’s selling price. This measurement gives the ...
Contractual provision allowing an individual or business to renege on a commitment in certain cases without being penalized. ...
A married partner. Property may be jointly held by spouses. ...
High quality, premium wood to be used in construction such as for home building. ...
If escrow is the legal “moment” where assets are held by a third party (an escrow agent) hired by both the buyer and the seller of goods like real estate and insurance until the ...
Sale that is finalized only in the case of a particular occurrence or eventuality. ...
Revocation comes from the verb "to revoke", which means to take back the validity of something. The definition of revocation is detrimental to contract law. It gives the person making the ...
Governmental body having the responsibility for planning the future development of a jurisdictional area. A planning commission is responsible for developing and managing a zoning ordinance ...
Present worth of the property which is different than the price paid for it or its book value (cost less accumulated depreciation). The current value may be determined through appraisal. ...
Have a question or comment?
We're here to help.