Real Estate Glossary

B

Balance Sheet
A financial statement that shows assets, liabilities, and net worth as of a specific date.

Balloon Mortgage
A mortgage with periodic installments of principal and interest that do not fully amortize the loan as of its maturity date. With such mortgages, the outstanding or unpaid principal balance is due and payable in full as of its maturity date.

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. Typically people file for Chapter 7 (all debts wiped out) or Chapter 13 (establishes payment plan to pay of debts).

Basis Point
One one-hundredth (1/100) of a percent. Used to describe the amount of change in the yield of financial instrument, including mortgages.

Beneficiary
The person designated to receive the income from a trust, estate, or deed of trust.

Bill of Sale
A written document that serves to transfer interest in 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 Mortgage Payment
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. This result for the borrower is a substantial saving of interest.

Blanket Mortgage
A mortgage covering more than one piece of property.

Bond
An interest-bearing certificate of debt with 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. The best known is the 30-year Treasury Bond by the U.S. Government.

Breach
A violation of any legal obligation.

Bridge Loan
A form of interim loan, generally made between a short term loan and a long term loan, when the borrower needs to have more time before taking on long term financing.

Broker
A person who, for a commission or a fee, brings parties together and assist in negotiating contracts between them. Mortgage brokers help consumers locate suitable real estate loans and are paid a fee for their services.

Buydown
A financing technique in which points are paid to the lender by the seller or builder that lowers (buys down) the effective interest rate paid by the buyer/borrower, thus reducing the amount of the monthly payment for a set period of time. See "temporary buydown".

Buyer's Broker
Agent who takes the buyer as a client, and is obligated to represent their interest above all others, and owes specific fiduciary duties.