Balance Sheet
A financial statement that shows assets,
liabilities, and net worth as of a specific date.
A mortgage that has level monthly payments
that will amortize it over a stated term but that provides for a lump sum
payment to be due at the end of an earlier specified term.
Balloon Payment
The final lump sum payment that is made at
the maturity date of a balloon mortgage.
Bankrupt
A person, firm, or corporation that,
through a court proceeding, is relieved from the payment of all debts
after the surrender of all assets to a court-appointed trustee.
Bankruptcy
A proceeding in a federal court in which a
debtor who owes more than his or her assets can relieve the debts by
transferring his or her assets to a trustee.
Before-Tax Income
Income before taxes are deducted.
Beneficiary
The person designated to receive the income
from a trust, estate, or a deed of trust.
Bequeath
To transfer personal property through a
will.
Betterment
An improvement that increases property
value as distinguished from repairs or replacements that simply maintain
value.
Bill of Sale
A written document that transfers title to
personal property.
Binder
A preliminary agreement, secured by the
payment of an earnest money deposit, under which a buyer offers to
purchase real estate.
Your lender will probably tell you that a
biweekly mortgage is structured just like a traditional fixed-rate,
level-payment, fully amortizing mortgage. However, you make your payments
every 14 days instead of once a month. The monthly payment is split in
half, resulting in the same total monthly mortgage, but the resulting 26
and sometimes 27 biweekly payments a year translate into 13 monthly
payments, or one extra monthly payment per year.
Borrowers can qualify for a 30-year monthly
payment amount, but get a loan that pays off in approximately 22 years at
current interest rates. At higher rates, the actual term declines.
If you are looking to build up equity in
your home faster without the higher mortgage payments that come with a
shorter-term mortgage, you may want to consider the biweekly mortgage.
Payments can be deducted from your bank account and scheduled to coincide
with your payroll deposits to simplify budgeting. Lenders may charge an
initial set-up fee to automatically debit your checking account.
Biweekly Payment Mortgage
A mortgage that requires payments to reduce
the debt every two weeks (instead of the standard monthly payment
schedule). The 26 (or possibly 27) biweekly payments are each equal to
one-half of the monthly payment that would be required if the loan were a
standard 30-year fixed-rate mortgage, and they are usually drafted from
the borrower's bank account. The result for the borrower is a substantial
savings in interest.
Blanket Insurance Policy
A single policy that covers more than one
piece of property (or more than one person).
Blanket Mortgage
The mortgage that is secured by a
cooperative project, as opposed to the share loans on individual units
within the project.
Bona fide
In good faith, without fraud.
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.
Breach
A violation of any legal obligation.
Bridge Loan
A form of second trust that is
collateralized by the borrower's present home (which is usually for sale)
in a manner that allows the proceeds to be used for closing on a new house
before the present home is sold. Also known as "swing loan."
Broker
A person who, for a commission or a fee,
brings parties together and assists in negotiating contracts between them.
Budget
A detailed plan of income and expenses
expected over a certain period of time. A budget can provide guidelines
for managing future investments and expenses.
Budget Category
A category of income or expense data that
you can use in a budget. You can also define your own budget categories
and add them to some or all of the budgets you create. "Rent" is an
example of an expense category. "Salary" is a typical income category.
Building Code
Local regulations that control design,
construction, and materials used in construction. Building codes are based
on safety and health standards.
Buydown Account
An account in which funds are held so that
they can be applied as part of the monthly mortgage payment as each
payment comes due during the period that an interest rate buydown plan is
in effect.
Buydown Mortgage
A temporary buydown is a mortgage on which
an initial lump sum payment is made by any party to reduce a borrower's
monthly payments during the first few years of a mortgage. A permanent
buydown reduces the interest rate over the entire life of a mortgage.
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