Mortgage and Real Estate Glossary

Real Estate Definitions and Terms: B

Offers a Mortgage and Real Estate glossary for real estate and mortgage terms and definitions for home buyers, home sellers, and real estate consumers. Find expanded definitions of important real estate and mortgage home loan terms.

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Definitions and Terms: B

Balloon Mortgage - Behaves like a fixed-rate mortgage for a set number of years (usually five or seven) and then must be paid off in full in a single "balloon" payment.

Balloon Payment - Final lump sum that is paid at the end of the balloon mortgage.

Bankruptcy - Tactic that individuals use to relieve themselves of debts and/or liabilities when they are no longer able to repay. The most common form of individual bankruptcy is a Chapter 7, when an individual frees himself from most of his/her debts. Borrowers who have undergone bankruptcy usually cannot qualify for "A" paper loans until after two years after declaration and a re-establishment of credit.

Basis - Original cost of property plus value of any improvements put on by the seller minus the depreciation taken by the seller.

Beneficiary - Lender named on the mortgage note. One entitled to the proceeds of property held in trust, also proceeds of wills, insurance policies, or trusts.

Best Faith Estimate - Estimate of the total costs for securing a real estate loan, that is given to borrowers prior to closing.

Bill of Sale - Written document that transfers a title to personal property.

Binder (Purchase) - Contract in which a seller agrees to sell and a buyer agrees to buy, under certain specific terms and conditions spelled out in writing and signed by both parties. Usually (but not always) secured by the payment of earnest money. In some states it is known as a Purchase Agreement, Land Contract, or Earnest Money Contract.

Binder (Title Commitment) - Report issued by a title insurance company setting forth the condition of title and setting forth conditions under which the title company will issue a title insurance policy.

Biweekly Mortgage - Mortgage loan payments that requires a payment twice monthly, yielding thirteen payments per year instead of twelve. This significantly reduces the time a principal is paid off.

Blanket Mortgage - Mortgage secured by the pledging of more than one property or collateral.

Blockbusting - Illegal practice of inducing panic selling in a neighborhood by making representations of the entry, or prospective entry, of members of a minority group.

Book Value - Acquisition costs less any accrued depreciation.

Borrower - Person who has been approved to receive a loan and is then obligated to repay it and any additional fees according to the loan terms.

Breach of Contract - Failure, without legal excuse, of one of the parties to a contract to perform according to the contract.

Broker - Individual in the business of assisting in arranging funding or negotiating contracts for a client but who does not loan the money himself. Brokers usually charge a fee or receive a commission for their services.

Bridge Financing - Form of interim loan, generally made between a short term loan and a long term loan, when the borrower needs to have more time before taking on long term financing.

Bridge Loan - Equity loan secured to solve short-term financing problem.

British Thermal Unit (BTU) - Unit of heat required to raise one pound of water one degree Fahrenheit.

Brokerage - For a commission or fee, bringing together parties interested in buying, selling, exchanging, or leasing real property.

Budget - Detailed record of all income earned and spent during a specific period of time.

Budget Mortgage - Mortgage that includes a portion for taxes and insurance as well as principal and interest.

Building Code - Based on agreed upon safety standards within a specific area, a building code is a regulation that determines the design, construction, and materials used in building.

Building Line - (Setback) Line fixed at a certain distance from the front and/or sides of a lot beyond which no structure can project.

Bundle of Rights - Ownership in real property implies a group of rights, such as the right of occupancy, use and enjoyment, the right to sell in whole or in part, the right to control the use, the right to bequeath, the right to lease any or all of the rights, the right to the benefits derived by occupancy and use of the property, etc.

Buydown - Cash payment, usually measured in points, to a lender in order to reduce the interest rate a borrower must pay. The seller may increase the sales price to cover the cost of the buydown.

Buyers Agent - Licensee who represents only the buyer in a transaction, regardless of whether compensation is paid by the buyer or the listing broker through a commission split. Brokers who conduct their business by representing buyers only are Exclusive Buyers Broker.

Buyers Broker - (Buyer's Agent) Licensee who represents only the buyer in a transaction, regardless of whether compensation is paid by the buyer or the listing broker through a commission split. Brokers who conduct their business by representing buyers only are Exclusive Buyers Broker.

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