B
Mortgage Terms

Balloon Mortgage: a mortgage that typically offers low rates for an initial period of time (usually 5, 7, or 10) years; after that time period elapses, the balance is due or is refinanced by the borrower.

Balloon Payment: The final sum paid on the maturity date of the balloon mortgage.

Bankruptcy: a federal law whereby a person's assets are turned over to a trustee and used to pay off outstanding debts; this usually occurs when someone owes more than they have the ability to repay.

Biweekly Mortgage Payment: Mortgage payments are made every 2 weeks instead of once a month. The borrower saves a substantial amount of interest paid to the lender.

Blanket Mortgage: A mortgage the covers at least two pieces of real estate as security for the same mortgage.

Borrower: a 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.

Bridge Loan: A second trust that is collateralized by the borrower’s present home allowing the proceeds to be used to close on a new house before the present home is sold.

Broker: an individual who assists in arranging funding or negotiating contracts for clients.

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.

Budget: a detailed record of all income earned and spent during a specific period of time.

Buy Down: when the lender and/or home builder subsidized the mortgage by lowering the interest rate during the first few years of the loan. Initially the payments are low but usually increase when the subsidy expires.