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home :: Mortgage Terms
Glossary B
Mortgage Terms Glossary
B
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.
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: a loan requiring
payments of principal and interest at two-week intervals. This type
of loan amortizes much faster than monthly payment loans. The
payment for a biweekly mortgage is half what a monthly payment would
be.
Bond: a certificate serving as security
for payment of a debt. Bonds backed by mortgage loans are pooled
together and sold in the secondary market.
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 loan to "bridge" the gap
between the termination of one mortgage and the beginning of
another, such as when a borrower purchases a new home before
receiving cash proceeds from the sale of a prior home. Also known as
a swing loan.
Broker: an intermediary between the
borrower and the lender. The broker may represent several lending
sources and charges a fee or commission for services.
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: a type of mortgage which
requires the buyer to pay additional discount points or make a
substantial down payment in return for a below market interest rate.
Another form of a buy-down is one in which the seller offers 3-2-1
interest payment plans or pays closing costs such as the origination
fee. During times of high interest rates buy-downs may induce buyers
to purchase property they might otherwise not have purchased.
Related
Topics:
Residential Mortgage Loans
Home Equity Lines of
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