Real Estate Glossary: N
May 6, 2008Net Cash Flow
Incremental after-tax income plus depreciation expense resulting from investment.
Net Income
The difference between effective gross income and a person’s expenses. The term is qualified as net income before depreciation and debt.
Net proceeds from the sale
Residual amount deriving from the sale of an immovable once all selling expenses have been deducted, i.e. mortgage loan balance, broker compensation, legal fees, tax adjustments, etc.
Net Worth
The total of all assets minus the total liabilities of an individual or company. Assets can include property, vehicles, or investments whereas liabilities are debts such as mortgages and credit card bills.
Niche Banks
Small banking centers that cater to certain communities or specialized industries. Niche banks are thriving in the fallout from mega-bank mergers.
No-documentation Loan
A loan that does not require the applicant to provide much personal information. The applicant usually provides their name, address, Social Insurance Number (to pull credit reports), and contact information for an employer, if applicable. The underwriter simply approves or denies the loan based on the applicant’s credit history, the appraised value of the property, and the amount of down payment. A large down payment is usually required for this type of loan.
No Money Down Mortgage
A true 100% mortgage financing product that is available in Canada. This type of mortgage generally has a higher interest rate.
Non-assumption Clause
A condition of a loan agreement that prohibits the borrower from transferring the mortgage to another borrower without permission from the lender.
Non-liquid Asset
An asset or possession that cannot be converted into cash quickly. Stocks and bonds are liquid assets because they are easy to sell quickly, but property is considered a non-liquid asset because there is no guarantee it will sell within a certain time period.
Non-owner Occupant
A borrower who purchases a property for investment or rental purposes and will not occupy the property.
Non-recurring Closing Costs
Fees that are paid once, usually at a real-estate closing. Closing costs can include origination fees, appraisal costs, points, and title insurance.
Non-resident Alien
A non permanent resident or someone who is not a Canadian citizen, and who is usually taxed on income from Canadian resources.
Notice of Default
The step in the foreclosure process where the lender informs the court that the borrower is in arrears.
