Negative amortization - Occurs when your monthly payments are not large enough to pay all the interest due on the loan. This unpaid interest is added to the unpaid balance of the loan. The danger of negative amortization is that the home buyer ends up owing more than the original amount of the loan.

Net effective income - The borrower's gross income minus federal income tax.

Net worth - The difference between total assets and total liabilities.

Non-assumption clause - A statement in a mortgage contract forbidding the assumption of the mortgage without the prior approval of the lender. Note: The signed obligation to pay a debt, as a mortgage note.

Non-performing loan - A loan in default. A loan of which no payments are being made and in danger of resulting in foreclosure.

Notary public - One authorized by law to acknowledge and certify documents and signatures.

Note - A written promise to pay a certain sum of money at a certain time. A negotiable note starts "Pay to the order of" and is transferable by endorsement similar to a check.