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
Government official who values real estate property for tax purposes and ascertains the annual property tax assessments that must be collected. ...
Time period for which one expects to keep property such as a real estate investment. ...
Something that is of good value for the money and an attractive deal. ...
To default on a loan means to intentionally or unintentionally miss several consecutive monthly payments over the course of a few weeks or months. Most borrowers learn the definition of ...
Absence of a personal liability such as when a creditor may seize an office building used as security for the obligation but cannot attach any other assets of the debtor. ...
The definition of obligee is the person to whom a debt or obligation is owed. An obligee is one party of a contract to who the other party, the obligor, is obligated. An obligee is also the ...
Items of real and personal property that usually have a long life, such as housing and other real estate. ...
Corporation having only one person, A corporation sole is primarily used for the purposes of a nonprofit ecclesiastic church related organization. Ina church, the corporation sole is headed ...
(1) Type of loan where the final payment is substantially greater than the previous payments; also termed partially amortized loan. A debt agreement might stipulate a balloon payment when ...
Have a question or comment?
We're here to help.