Mortgage and Loan Glossary (B)
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backfill
The replacement of excavated dirt into a hole, crevice or against a
structure such as a foundation.
backup contract
A contract to buy property that becomes effective if a prior contract
fails to be agreed upon.
balance sheet
A financial statement in table form that shows assets, liabilities,
and net worth as of a specific date.
balloon mortgage
A mortgage that has equal periodic monthly payments that will amortize
it over a stated term but that requires a single, usually large,
lump sum payment to be due at the end of an earlier specified term.
balloon payment
The final payment that is made at the maturity date of a balloon mortgage
and pays the loan in full.
bankrupt
A person, company, or corporation that, through formal court proceeding,
is relieved from the payment of all debts after the surrender of
some or all assets to a court-appointed trustee.
bankruptcy
A court proceeding in which a debtor who owes more than his assets
can relieve the debts by transferring his assets to a trustee.
before-tax income
Income before deducting taxes.
Beige Book
A survey of economic conditions conducted in the Federal Reserve's
12 regional banks in preparation for Federal Open Market Committee
meetings. Frequency: twice per quarter. Source: Federal Reserve.
beneficiary
The person designated to receive the benefits resulting from certain
acts.
bequeath
To transfer personal property through a will or last testament. Compare
with devise.
betterment
An improvement that increases property value as opposed to repairs
or replacements that simply maintain value.
billing error
Any mistake in your monthly statement as defined by the Fair Credit
Billing Act.
bill of sale
A written instrument that transfers title to personal property.
binder
A preliminary agreement, accompanied by a good faith deposit, under
which a buyer offers to purchase real property.
biweekly payment mortgage
A mortgage that requires payments to reduce the debt every two weeks
instead of monthly. The 26 (sometimes 27) biweekly payments are each
equal to one-half of the monthly payment that would be required with
a standard 30-year fixed-rate mortgage. The result is a faster loan
balance reduction with a substantial savings in interest.
blanket insurance policy
A single policy that covers more than one piece of property (or more
than one person).
blanket mortgage
A single mortgage that is secured by more than one parcel of real estate.
bona fide
In good faith and without fraud.
bond
An interest-bearing certificate that serves as evidence of a debt with
a maturity date. Typically, bonds represent obligations of a government
or business corporation. A real estate bond is a written obligation
usually secured by a mortgage or deed of trust.
breach of contract
A violation of the terms of any legal obligation or agreement.
bridge loan
A form of second trust financing that is secured by the borrower's
present home (which is usually for sale) in a procedure that allows
the profits to be used for closing on a new house before the present
home is sold. Sometimes called a swing loan or gap loan.
broker
A state-licensed agent who, for a commission or a fee, represents property
owners in real estate transactions.
budget
A detailed plan of income and expenses estimated over a specified period
of time. Budgets provide guidelines for managing costs and profits.
budget category
A category of income or expense data that you can use in a budget.
building code
Regulations established by local governments that control design, construction,
and materials used in construction. Building codes are usually based
on standardized health and safety guidelines..
business days
Check with your lending institution to find out what days it counts
as business days under the Truth in Lending and Electronic Fund Transfer
Acts. Usually excludes weekends and holidays.
buydown account
An account in which money is held so that it can be applied to the
monthly mortgage payment as each payment comes due during the period
that an interest rate buydown plan is in effect.
buydown mortgage
A temporary buydown is a mortgage on which an initial large, lump sum
payment is made to reduce a borrower's monthly payments during the
first few years of a mortgage. A permanent buydown reduces the interest
rate over the entire life of the loan.