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Balloon (Payment) Mortage |
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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. |
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Bankruptcy |
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A provision of Federal Law whereby a debtor surrenders his assets to the Bankruptcy Court and is relieved of the future obligation to repay his unsecured debts. A Trustee in Bankruptcy administers the assets, selling them to pay as much of the debt as possible. If your seller is in bankruptcy, the Trustee in Bankruptcy owns the property and is the party to sign the contract and make decisions. After bankruptcy, the debtor is discharged and his unsecured creditors may not pursue further collection efforts against him. Secured creditors, those holding deeds of trust or judgment liens, continue to be secured by the property but they may not take other action to collect from the debtor. |
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Basis Point |
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1/100th of 1% of yield. Used to describe the amount of change in yield in many debt instruments, including mortgages. |
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Beneficiary |
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A person named to receive a benefit from a TRUST. A contingent beneficiary has conditions attached to his rights, usually someone else must die first. |
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Bi-Weekly Mortgage |
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A mortgage with payments due every two weeks totaling 26 payments a year. |
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Blanket Mortgage |
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A mortgage covering at least two pieces of real estate as security for the same mortgage. This sort of loan is more common for commercial property or special case loans.
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Bond |
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An amount of money, often posted with the Court, to guarantee against loss as a result of a possible claim. For example, if there is a LIEN against the property, the owner may post a bond and the lien is removed from the property and the parties argue over the money rather than the property. |
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Borrower (Mortgagor) |
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One who applies for and receives a loan in the form of a mortgage with the intention of repaying the loan in full. |
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Breach Of Contract |
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Failure to perform provisions of a contract. |
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Broker |
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An individual in the business of assisting in arranging funding or negotiating contracts for a client buy who does not loan the money himself. Brokers usually charge a fee or receive a commission for their services. |
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Building Restriction Line |
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A required set-back a certain distance from the road within which no building may take place. This restriction may appear in the original plat of subdivision, restrictive covenants or by building codes and zoning ordinances. |
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Buy-Down |
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When the lender and/or the home builder subsidizes the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires. These are sometimes used to qualify borrowers for a loan amount that they would not otherwise qualify for but will be able to pay in subsequent years as their income increases. |
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