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Mortgage Glossary

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There are currently 22 names in this directory beginning with the letter B.

Balance Sheet
A financial statement that shows assets, liabilities, and net worth as of a specific date.

Balloon Mortgage
A mortgage that has level monthly payments that will amortize it over a stated term but that provides for a lump sum payment to be due at the end of an earlier specified term. The principal and interest on the loan are amortized over a longer period than the actual term of the mortgage.

Balloon Payment
The final lump sum payment that is made at the maturity date of a balloon mortgage.

A person, firm, or corporation that, through a court proceeding, is relieved from the payment of all debts after the surrender of all assets to a court-appointed trustee.

A legal proceeding that allows individuals or businesses to seek relief from debts they cannot repay.

Before-tax Income
Income before taxes are deducted.

The person designated to receive the income from a trust, estate, or a deed of trust.

To transfer personal property through a will.

An improvement that increases property value as distinguished from repairs or replacements that simply maintain value.

Bill of Sale
A written document that transfers title to personal property.

A preliminary agreement, secured by the payment of an earnest money deposit, under which a buyer offers to purchase real estate.

Biweekly Payment Mortgage
A mortgage that requires payments every two weeks, which is more frequent than the standard monthly payment schedule. These payments effectively reduce the loan balance faster and result in interest savings over time.

Blanket Mortgage
A mortgage that covers multiple properties or units under one mortgage. Typically used for real estate developments or investments.

Bona Fide
In good faith, without fraud.

A financial instrument representing debt owed by the issuer (borrower) to the bondholder (lender). Real estate bonds are often secured by mortgages or deeds of trust.

A violation of any legal obligation.

Bridge Loan
A short-term loan that bridges the gap between the purchase of a new property and the sale of an existing property. It’s often used when the buyer needs funds to buy the new property before selling the old one.

A person who acts as an intermediary or agent between parties involved in real estate transactions. Brokers facilitate negotiations, provide market insights, and assist with contracts.

Budget Category
A specific category of income or expense data used in budgeting. Budget categories help organize and track financial activities.

Building Code
Local regulations that establish standards for design, construction, and materials used in building projects. Building codes ensure safety and quality in construction.

Buydown Account
An account where funds are held to subsidize mortgage payments in a buydown mortgage. During the initial years of the mortgage, funds from the buydown account are used to lower the borrower’s interest rate and monthly payments.

Buydown Mortgage
A mortgage with a reduced initial interest rate, often for a specified period. A buydown mortgage usually involves an upfront payment (buydown fee) to lower the initial interest rate. The rate gradually increases over time to the regular rate, resulting in lower initial payments that increase over time.