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GLOSSARY
Non-amortizing loan
A non-amortizing loan is structured with interest only or minimal principal payments, such that the balance is not steadily paid down to zero at maturity. At some point, the borrower will need to refinance the principal amount, or make a large balloon payment.
Non-Assumption clause
statement in a mortgage contract forbidding the assumption of the mortgage by another borrower without the prior approval of the lender.
Non-callable
Non-callable describes a financial instrument, such as a preferred stock or bond, that can't be redeemed by the issuer before a specified maturity date. The non-callable feature is attractive from an investor's standpoint because it eliminates prepayment risk.
Non-conforming loan
A non-conforming loan is a debt arrangement that doesn't meet certain defined standards. Most often the term is used in reference to mortgages; a non-conforming mortgage doesn't meet federal standards that qualify a loan for repurchase or guarantee by Fannie Mae and Freddie Mac.
Non-contestability clause
A non-contestability clause is legal verbiage that punishes a beneficiary for attempting to dispute a will. Such a clause may also be used in a life insurance policy to prohibit the insurance provider from denying payment due to an error on the application. Usually, the clause gives the insurance provider a limited time period for contesting a claim. Non-contestability clauses, particularly with respect to wills, don't always hold up in court.
Non-financial asset
Nondischargeable debt is an obligation that can't be wiped away by a bankruptcy court. Bankruptcy courts aren't authorized to remove a debtor's personal obligation for tax claims, child support claims, alimony claims, and other specified debt types.
Non-liquid asset
A property or possession that cannot easily be turned into cash.
Non-owner occupied
Nondischargeable debt is an obligation that can't be wiped away by a bankruptcy court. Bankruptcy courts aren't authorized to remove a debtor's personal obligation for tax claims, child support claims, alimony claims, and other specified debt types.
Non-qualified stock options
Non-qualified stock options, or NSOs, are a form of employee compensation that give the employees the right to purchase the employer's stock at a stated price. The non-qualified descriptor means that these options are not eligible for deferred tax treatment, and a tax event occurs in the year the employee exercises the option. The employee is taxed on the difference between the market price of the stock and the exercise price.
Non-qualifying investment
A non-qualifying investment is any asset purchased for financial gain that's not eligible for preferential tax treatment. Securities held within an IRA, for example, qualify for certain tax advantages, while a regular savings deposit does not.
Non-recurring closing costs
The fees paid at the close of a real estate settlement. The fees cover loan origination, the title insurance, escrow fees, and credit report management.
Non-revolving credit card
A non-revolving credit card is a credit account that requires payment of the full balance outstanding at the end of each billing period.
Nondischargeable debt
Nondischargeable debt is an obligation that can't be wiped away by a bankruptcy court. Bankruptcy courts aren't authorized to remove a debtor's personal obligation for tax claims, child support claims, alimony claims, and other specified debt types.
Nonpassive income
Nonpassive income describes earnings that are actively generated, such as wages and business profits where the taxpayer materially participates in the business operations. This compares to passive income, which is generated through investment vehicles. The classification of earnings as nonpassive or passive is important in the calculation of income taxes.
Nonpayroll withholding
Nonpassive income describes earnings that are actively generated, such as wages and business profits where the taxpayer materially participates in the business operations. This compares to passive income, which is generated through investment vehicles. The classification of earnings as nonpassive or passive is important in the calculation of income taxes.