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
Architectural style featuring a long low roof line with a continuous row of windows and a plain exterior. It is very open design with long horizontal lines rather than having small secluded ...
Real annual return on a real estate investment. It equates the initial investment with the present value of future net cash inflows from the investment. The IRR can be determined by using a ...
Relating to trees or shrubs normally found in temperate climates. Deciduous trees shed their leaves in the fall. Deciduous woods such as pine, oak, Maple, redwood, and spruce are widely ...
Founded in 1857 and located in Washington, DC, with over 54,000 members, throughout the United States, the AIA has 301 local groups in all 50 states. ...
If “image is everything”, then home staging is the most important and effective process in a real estate sale. But what is home staging? Well, when real estate agents are ...
Generic name given for any association of property owners sharing an interest in commonly owned property. Community associations may be developed in condominium, cooperative, or housing ...
First right of a party, usually a creditor, to hold, keep possession of, or control the property of another to pay a debt, duty, or obligation. ...
In taxation losses that can offset ordinary income. Assume john owns and operates an apartment house. Minor tenant damage to the property is used to offset rental income. ...
Uncertainties associated with real property including lack of insurance coverage in the event of fire or injury, high crime area, and environmental problems. This risk may be reduced ...
Have a question or comment?
We're here to help.