balance
sheet
A financial statement that shows assets, liabilities, and
net worth as of a specific date.
balloon mortgage
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.
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. See mortgage broker.
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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