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Mortgage and Real Estate Glossary

Alberta Equity's glossary contains hundreds of terms. With this tool, you can click or search through the largest real estate and mortgage glossary in Canada!

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N.S.F. Cheque
NSF means Not Sufficient Funds. If a cheque is returned for this reason, it means that there was not enough money in your bank account to cover the amount of the cheque. There is a fee to you if this situation occurs.
Negative Amortization
A gradual increase in mortgage debt that happens when the monthly payment does not cover the entire principal and interest due. The shortfall is added to the remaining balance to create "negative" amortization.
Negative-equity Financing
Financing for new car buyers who owe more on their trade-in than the car is worth.
Net Cash Flow
Incremental after-tax income plus depreciation expense resulting from investment.
Net Income
The difference between effective gross income and expenses. The term is qualified as net income before depreciation and debt.
Net Interest Margin
Net interest income (the difference between interest income and interest expense) as a percentage of average total assets.
Net Operating Loss (NOL)
A net loss for the tax year attributable to business or casualty losses. Taxpayers may use an excess loss of one year as a deduction for certain past or future years.
Net Worth
The total value of all assets, such as house, car, furniture and investments, minus all debts, such as mortgages and credit card bills.
The offsetting with a counter-party of financial obligations or payments one is owed with those one is entitled to receive, thus reducing the costs arising out of payment settlements. Netting is also used as a risk management tool to help counter-parties reduce their exposure to credit risk.
Niche Banks
Smaller banks that cater to particular communities or certain industries. These banks have been thriving in the fallout from mega-bank mergers.
NIMBY (Not In My Backyard)
A term, usually used derisively by people who don't live in the affected vicinity, to describe residents' opposition to the introduction of something they don't want in their neighborhood, such as a group home, toxic waste incinerator or prison.
No Money Down Mortgage
Available in Canada as a true 100% mortgage financing product.
No-doc Loan
See "No-documentation Loan".
No-documentation Loan
A mortgage in which the applicant provides a minimum of information — name, address, Social Insurance number (so credit reports can be pulled), and contact information for an employer, if there is one. The underwriter decides on the loan based on the applicant's credit history, the appraised value of the house and size of down payment.
Non-assumption Clause
A provision of a home loan that prohibits the transfer of the mortgage to another borrower without the lender's permission.
Non-dischargeable Debt
A debt that cannot be eliminated in bankruptcy. Most Federal taxes is a good example.
Non-liquid Asset
A possession that can't be transformed readily into cash. Stocks and bonds are liquid assets because they can be sold easily; a house is a non-liquid asset because it takes time to sell.
Non-owner Occupant
A borrower who will not be residing in the subject property as their principal residence; the borrower on rental/investment property.
Non-recurring Closing Costs
One-time fees paid at a real-estate settlement, including origination, appraisal, points, title insurance and credit report.
Non-refundable Credit
Tax credits reduce your tax liability dollar-for-dollar. Non-refundable credits can get your tax bill down to zero.
Non-resident Alien
A person who is not a permanent resident or a citizen of Canada, and who is generally taxed on income from Canadian resources.
North American Free Trade Agreement (NAFTA)
An agreement among the United States, Canada and Mexico that will allow for freer trade between the three countries.
A legal acknowledgment of a debt and an implicit promise to repay. It includes the loan amount, interest rate and term.
Note Rate
Percentage a borrower pays for the use of money, usually expressed as an annual percentage, as specified on a promissory document.
Notice of Assessment
A form the federal government issues when personal taxes are complete. A notice of assessment shows a breakdown of the given years income along with the balance owing or refund.
Notice of Default
A step in the foreclosure process in which the lender formally tells a court that the borrower is in arrears.
NSF or N.S.F.
Also referred to as a returned or "bounced" cheque charge or non-sufficient funds fee. The amount of money charged to an account holder whose account has insufficient funds available to pay the cheque, which is returned to the party who cashed it unpaid. (The bank did not advance the funds to cover cheque.)
Number of Free Transactions per Month
The number of transactions that can be processed without charge to the account holder. If this limit is exceeded, the per-item charged is assessed. Account features may include an unlimited number of free transactions or no free transactions per month.