GLOSSARY OF MORTGAGE TERMS - B
Balloon Mortgage (Balloon Payment)
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 (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 (also called balloon mortgage).
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 his or her ability to repay.
Baseline Program (Standard Program)
Another name for the standard program, under which the U.S. Federal Home Loan Mortgage Corporation purchases mortgages for cash.
One one-hundredth (1/100, or .01) of 1 percent. Yield differences among fixed-income securities are stated in basis points.
One who benefits from owning a security, even if the security's title of ownership is in the name of a broker or bank ('street name').
The price at which a buyer is willing to buy a security.
Bill of Sale
A written document transferring title to personal property; lenders usually require a bill of sale (on an automobile, for example) in order to verify the source of the funds used as a downpayment.
A mortgage requiring payments every two weeks instead of every month. This reduces the time it takes to pay off a 30-year mortgage.
A mortgage covering at least two pieces of real estate.
Slang for standard legal language used in loan forms, real estate closings, etc.
A written promise to pay a stipulated sum of money to a specified party under conditions mutually agreed upon. Also called a promissory note, promise, or bond.
The daily buying and selling of thirty year Treasury bonds; lenders follow this market very closely. Factors affecting the Treasury bond market also affect mortgage rates, which is why rates can change several times per day.
A method of registering and transferring ownership of securities electronically, thereby eliminating the need for physical certificates.
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 (also called a mortgagor).
Rarely used today, bridge loans are used to purchase property by those who have not yet sold their previous property; they have become less popular as second mortgage lenders increasingly lend at a high loan to value, while sellers generally prefer buyers who have already sold their property.
An individual who assists in arranging funding or negotiating contracts for a client, although a broker does not loan the money itself. A broker typically charges a fee or receives a commission.
A detailed record of all income earned and spent during a specific period of time.
A mortgage that can at least partially cover taxes, insurance, principal and interest.
Based on agreed-upon safety standards within a specific area; regulations that determine the design, construction, and materials used in building.
Occurs as the lender or the home builder subsidizes the mortgage, by lowering the interest rate over the first few years. To begin, the payments are low; however, they increase as the subsidy expires.
A written agreement between a homeowner/borrower, a construction lender and a permanent lender that assigns the mortgage to the permanent lender when the construction is completed. Also called a tri-party agreement.
A market condition characterized by an oversupply of items for sale resulting in lower prices for the buyer. Opposite of a seller's market.
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