Negative Amortization: - Increase in principal balance that occurs when monthly payments are not large enough to pay all interest incurred on a loan, usually caused when payment caps prevent sufficient payment increases. Deferred interest is added to the loan balance, resulting in the borrower owing more than the original amount of the loan.

Net: After taxes.

Net Effective Income: Gross income minus federal income tax.

Non Assumption Clause: A statement in a mortgage contract forbidding the assumption of the mortgage by another borrower without the prior approval of the lender.

Nondischargeable Debt: Debt, such as taxes, that cannot be forgiven in a bankruptcy liquidation.

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

Note: Legal document stating the terms of a debt and a promise to repay it.