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
There’s a lot of confusion regarding the hazard insurance definition. Many people think it’s a synonym for homeowners insurance but they’re wrong. Hazard insurance is ...
Lender has an equity interest in the property that is the subject of the loan. The lender shares in the increase in market price of the property as well as any net income generated. ...
Owned by one individual or sole ownership. ...
Roof having two slopes or pitches on each side. The lower slope is greater than the upper slope. ...
Inappropriate and possibly harmful use of land. For example, a factory located on the shore of a river discharges toxic pollutants into the waterway. ...
Standard precut lumber sizes for lumber industry needs. The typical sizes are 2 to 5 inches thick by 5 to 12 inches wide. ...
Structure have two dwelling units under the same roof. Two-story apartment unit. ...
The definition of cooperative housing is well known by real estate agents because they are often involved in the selling process, in most cases. Cooperative housing is a form of ...
Determines the ability of soil to absorb and draw down water. A percolation test is essential to determine the location of a drainage field for waste disposal. ...
Have a question or comment?
We're here to help.