Balloon Payment Mortgage: Usually
a short-term fixed-rate loan which involves small
payments for a certain period of time and one large
payment for the remaining amount of the principal
at a time specified in the contract.
Bankruptcy: The financial inability
to pay one's debts when due. The debtor surrenders
his assets to the bankruptcy court. An individual
typically files for Chapter 7 (all debts wiped out)
or Chapter 13 (establishes a payment plan to pay off
debts). A bankruptcy stays on an individual's credit
report for 7 years.
Beneficiary: The person who receives
or is to receive the benefits resulting from certain
acts.
Binder Definition #1: A title insurance
binder is the written commitment of a title insurance
company to insure title to the property subject to
the conditions and exclusions shown on the binder.
Binder Definition #2: Preliminary
agreement, normally secured with earnest money, between
a buyer and a seller as an offer to purchase real
estate.
Bi-weekly Mortgage: A mortgage which
requires 1/2 the normal monthly payment every two
weeks. Over the course of the year, 26 half payments
are made which is equivalent to 13 full mortgage payments.
As a result of this extra payment the loan amortizes
much faster than a loan with normal monthly payments.
Blanket Mortgage: A mortgage covering
more than one piece of property.
Bond Definition #1: A debt instrument
in the capital markets. The U.S. government, corporations
and municipalities use bonds to raise money. Bonds
can also be backed by mortgages. The best known bond
is the 30-year treasury bond issued by the U.S. government.
Bond Definition #2: A sum of money
given to a court to guarantee against a loss. For
example if there is a lien on a property, the owner
may remove the lien by posting a bond.
Borrower On who applies for a loan secured by real
estate and is responsible for repaying the loan.
Bridge Loan: An interim loan typically
used when the buyer is unable to sell his/her house
but needs money to close the transaction on the house
he/she is buying. The bridge loan is made on the buyers
current residence to finance the buyers new residence.
The loan is paid off when the buyers current residence
is sold.
Broker: See Real Estate Broker or Mortgage
Broker.
Buy Down: Obtaining a lower interest
rate (buying down the rate) by paying additional points
to the lender. The lower rate may apply for the full
duration of the loan or for just the first few years.
A buydown may be used to qualify a borrower who would
otherwise not qualify . This is because a buydown
results in lower payments which are easier to qualify
for.
Buyers Broker: An agent hired by
a buyer to locate a property for purchase. The broker
represents the buyer and negotiates with the sellers
broker for the best possible deal for the buyer.
Buyers Market: Market conditions
that favor buyers i.e. there are more sellers than
buyers in the market. As a result buyers have ample
choice of properties and may negotiate lower prices.
Buyers markets may be caused by an economic slump
or over building.
Bylaws: A set of regulations by which
an organization conducts its business.
