glossary - B
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Mid-Island Mortgage Corp. understands that the mortgage process is filled with phrases and terms that may be confusing and unfamiliar to those new to buying a home as well as those who have purchased and refinanced their homes in the past. We've provided a glossary to help clear away some of the mystery associated with the mortgage process.
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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 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.
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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