Negative Amortization

Business / Taxes / Negative Amortization: When your loan principal increases rather than decreases because your monthly payment isn’t enough to cover the loan interest, that’s called negative amortization. This can happen if you have an adjustable-rate mortgage (ARM) that specifies a payment cap, or maximum rate increase, and the interest rate rises above the cap. Negative amortization can also occur with mortgages that have no rate adjustment caps, or those that let you make very low initial payments that don’t cover the loan interest. The promise of low initial payments may make loans that could result in negative amortization attractive, but there are substantial risks. Eventually, your monthly payment will have to increase, sometimes sharply, to pay off the larger loan. If interest rates have risen, you may not be able to refinance at a favorable rate. And if real estate prices fall, you could find yourself with a mortgage loan that is larger than the value of your home.

Other Words for Negative

Negative Adjective Synonyms: contradictory, anti, contrary, dissenting, dissentious, disputing, disputatious, argumentative, adversarial, adversative, antagonistic, antipathetic, adverse, adversary
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Negative Pledge Clause

Business / Finance / Negative Pledge Clause: A bond covenant that requires the borrower to grant lenders a lien equivalent to any liens that may be granted in the future to any other currently unsecured lenders. MORE

Negative Reps

Health / Fitness / Negative Reps: One or two partners help you lift a weight up to 50% heavier than you would normally lift to finish point of movement. Then you slowly lower weight on your own. MORE

Negative Signs

Science / Astrology / Negative Signs: Earth and water signs; an alternate term used to describe 'feminine' characteristics of receptivity and passivity. See also feminine signs. MORE

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