Balloon Mortgage
A mortgage that has level monthly payments which
are insufficient to amortize the loan so that a
balloon, or lump sum payment is due at the end of
the term. Frequently, balloon mortgages contain an
opportunity to refinance when the balloon payment
is due.
Bank Attorney
The party with fiduciary responsibility to the
lender to ensure the terms of the loan are carried
out. Other responsibilities include review of
Title and Lien searches, Assignments and other
documents required to close the loan. Not all
states require a Bank Attorney. See Escrow
Agent
Bankruptcy
A proceeding in a federal court in which a debtor
(who owes more than his/her assets or cash flow)
is relieved from the payment of debts. This can
affect the borrower's personal liability or the
mortgage debt but not the lien of a mortgage.
Basis Points
Used to describe mortgage yield, one basis point
equals one 100th of 1% or 0.01%. A mortgage yield
increase from 9.50% to 9.75% is an increase of 25
basis points.
Bearer
The legal owner of a piece of property.
Before-tax Income
Income before tax is deducted.
Beneficiary
The person designated to receive the income from a
trust, estate, or a deed of trust.
Bequest
A gift of personal property by will.
Binder
A preliminary agreement secured by the payment of
an earnest money deposit under which a buyer
offers to purchase real estate.
Biweekly Mortgage
A loan requiring payments of principal and
interest at two-week intervals. Each biweekly
payment is half the amount of a monthly payment.
The borrower makes the equivalent of 13 monthly
payments each year. As a result, this type of loan
amortizes much faster than monthly payment loans.
Blanket Mortgage
A mortgage that covers more than one parcel of
real estate
Bona Fide
In good faith.
Bond
An interest-bearing certificate of debt with a
maturity date. An obligation of a government or
business corporation. A real estate bond is a
written obligation usually secured by a mortgage
or a deed of trust.
Borrower (Mortgagor)
An individual who applies for and receives funds
in the form of a loan and is obligated to repay
the loan in full under the terms of the loan.
. Breach
A violation of any legal obligation.
Bridge Loan
A loan, usually a second mortgage, that is
collateralized by the borrower's present home
(that is usually for sale).
Broker
An individual who brings buyers and sellers
together and assists in negotiating contracts for
a client.
Building Line or Setback
Distances from the ends and/or sides of the lot
beyond which construction may not extend. The
building line may be established by a filed plat
of subdivision, by restrictive covenants in deeds
or leases, by building codes, or by zoning
ordinances.
Buy-Down
Where the buyer pays additional discount points in
return for a below market interest rate; or the
buyer or seller deposits sufficient funds with the
lender to reduce the rate during the first one to
three years of the loan; or pays closing costs
such as the origination fee. During times of high
interest rates, buy-downs may induce buyers to
purchase property they may not otherwise have
purchased.
Buyer's Market
Market conditions that favor buyers. With more
sellers than buyers in the market, sellers may be
forced to make substantial price concessions.
