Dictionary

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Negotiable Instrument

A written instrument such as a note that may be transferred by endorsement or delivery. The holder or payee may sign the instrument over to another person or in certain cases merely deliver it to him or her. The transferee then has the original payee’s right to payment.

Net Cash Flow

The income that remains for an investment property after the monthly operating income is reduced by the monthly housing expense, which includes principal, interest, taxes, and insurance (PITI) for the mortgage, homeowners’ association dues, leasehold payments, and subordinate financing payments.

Net Cost

Premiums paid minus cash value and any policy dividends paid as of the date the calculation is being made.

Net lease

A lease requiring that the tenant pay not only rent but also all costs incurred in maintaining the property including taxes, insurance and repairs.

Net Listing

A listing based on the net price the seller will receive if the property is sold. Under a net listing, the broker is free to offer the property for sale at the highest price he or she can get in order to increase the commission. This type of listing is outlawed in many states.

Net Worth

The value of all of a person’s assets, including cash, minus all liabilities.

No Cash-out Refinance

A refinance transaction in which the new mortgage amount is limited to the sum of the remaining balance of the existing first mortgage, closing costs (including prepaid items), points, the amount required to satisfy any mortgage liens that are more than one year old (if the borrower chooses to satisfy them), and other funds for the borrower’s use (as long as the amount does not exceed 1 percent of the principal amount of the new mortgage).

No-Fault Insurance

A form of Automobile insurance mandated by law in many states whereby an insurance company reimburses its insured for auto losses, regardless of fault, and without resort to subrogation.

Non-cancelable

A contract of Health insurance that the insured has a right to continue in force by payment of premiums, as set forth in the contract, for a period of time, and that the insurer has no right to change any provision of the contract.

Non-forfeiture Option

A legal provision whereby the policy owner may take the accumulated values in a policy as one of the following: 1) Cash surrender – lump sum payment of cash value, less any unpaid premiums or outstanding loans; 2) Extended term – a term policy with the same face amount as the original policy, lasts for a period of time; 3) Reduced Paid-Up – whole life insurance for a lesser face amount. The acronym of C-E-R helps here!