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Glossary

Mortgage Glossary

B

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 Due at End of Loan Term

Some home equity loans may have a balance due at the end of the loan term. This means that if you make the minimum monthly payment during the life of the loan the entire balance will not be paid in full. A "balloon" payment will be due at that time.

Balance Sheet

A financial statement in a table form that shows assets, liabilities and net worth.

Balloon Mortgage

A short-term fixed-rate loan which involves smaller payments for a certain period of time and one large payment for the entire balance due at the end of the loan 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 debt 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.

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.

Bi-weekly Payment Mortgage

A mortgage that requires payment 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 substantial savings in interest.

Bill of Sale

A written instrument that transfers title to personal property.

Binder

An agreement between a buyer and seller to purchase real estate. A binder, also known as an offer to purchase or a sales contract, secures the right to purchase real estate upon agreed terms for a limited period of time. If the buyer changes his mind or is unable to purchase, the earnest money that was paid is forfeited unless the binder expressly provides that it is to be refunded.

Blanket Insurance Policy

A single policy that covers more than one piece of property (or more than on person).

Breach of Contract

A violation of the terms of any legal obligation or agreement.

Broker

A state-licensed agent who, for a commission or a fee, represents property owners in real estate transactions.

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.

Buydown

A process that allows a borrower to obtain a lower interest rate on a mortgage by paying points to a lender. A temporary buydown will reduce the interest rate paid during the first few years of the loan. A permanent buydown reduces the interest rate over the entire life of the loan.