Negative amortization cap
Definition
The maximum amount of negative amortization permitted on an ARM, usually expressed as a percentage of the original loan amount (e.g., 110%). Reaching the cap triggers an automatic increase in the payment, usually to the fully amortizing payment level, overriding any payment increase cap.
Related Terms Other terms related to 'Negative amortization cap' starting with the letter 'N' Non conforming mortgage, No income loan, Net branch, Note, Net jumping Browse by Letter » 1 4 A B C D E F G H I J L M N O P Q R S T U V W Y | 