negative amortization

negative amortization
Category: Personal Finance & Retirement
Category: Real Estate & Rental Property → Buying a House

Nolo’s Plain-English Law Dictionary. . 2009.

negative amortization
USA
An increase in a loan balance, especially in an adjustable rate mortgage (ARM). Some ARMs permit the interest rate to change without any relation to a minimum payment requirement. When a borrower makes a minimum payment that does not cover all interest due under a current interest rate, the interest payment is deferred. The deferred interest is tacked onto the loan balance, which negatively amortizes as a result.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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  • negative amortization — the increase of the principal of a loan by the amount by which periodic loan payments fall short of the interest due, usually as a result of an increase in the interest rate after the loan has begun …   Useful english dictionary

  • Negative Amortization Limit — (лимит отрицательной амортизации) максимальный размер, на который может увеличиться сумма основного долга кредита с учетом отрицательной амортизации, прежде чем отношение размера кредита к стоимости предмета залога (LTV) превысит заданный размер …   Ипотека. Словарь терминов

  • Negative equity — occurs when the value of an asset used to secure a loan is less than the outstanding balance on the loan.[1] In the United States, assets (particularly real estate, whose loans are mortgages) with negative equity are often referred to as being… …   Wikipedia

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