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Nicolas Romo |
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(714)
231-3772 |
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Lic.
# 01787685 |
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Hablo Español |
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Negative
Amortization Loan (“Neg Am”)
This is a loan whereby the borrower is only required
to make a minimum payment, which usually does not
cover the interest that is due each month, causing
the principal loan balance to increase as a result.
These types of loans are normally only recommended
for the savvy real estate investor who knows what
he/she is doing.
Net Effective Income
This is an individual’s gross income minus federal
income tax.
No Cash-Out Refinance
This is when a borrower refinances his mortgage loan
without taking out any money. Instead, a new balance
is calculated to cover the balance due on an
existing mortgage and any costs with obtaining a new
loan. In general, this is typically done to take
advantage of low interest rates (which is usually
called a “rate and term refi”). Lenders also refer
to this as a no-cash refi.
No-Cost Loan
This is a mortgage that has either zero bank costs
related to it or a mortgage that also covers
property purchases or refinancing costs, which may
be incurred when purchasing a property, getting a
mortgage and/or refinancing a loan, but that are not
directly charged by the bank. This type of loan
carries a higher note rate.
Note
A note is the actual, legal document that requires
an individual to pay back a loan at the agreed upon
stated interest rate during a certain time period.
Note Rate
The note rate is the actual written interest rate on
a mortgage loan.
Notice of Default
This is when the lender sends a borrower a formal
written notice notifying them that they have
defaulted on the loan and that legal action may
follow. If the borrower does not cure the default,
foreclosure efforts are then taken by the lender. |
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