- negative amortization
See: capitalized interestCategory: Personal Finance & RetirementCategory: Real Estate & Rental Property → Buying a House
Nolo’s Plain-English Law Dictionary. Gerald N. Hill, Kathleen Thompson Hill. 2009.
- negative amortization
USAAn 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. www.practicallaw.com. 2010.
Look at other dictionaries:
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Negative amortization — A loan repayment schedule in which the outstanding principal balance of the loan increases, rather than amortizing, because the scheduled monthly payments do not cover the full amount required to amortize the loan. The unpaid interest is added to … Financial and business terms
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negative amortization — Fin an increase in the principal (see mortgage) of a loan due to the inadequacy of payments to cover the interest … The ultimate business dictionary
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Negative Amortization Limit — A provision in certain loan contracts that limits the amount of negative amortization that can take place. A loan negatively amortizes when scheduled payments are made that are less than the interest charge due on the loan at the time. When a… … Investment dictionary
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