| Affinity Moving Services Glossary of Terms |
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BACK END RATIO A comparison of a borrower's monthly expenses to her gross monthly income used to assess her ability to carry a mortgage or other loan.
BACKUP CONTRACT An Agreement of Purchase and Sale for a particular property which is conditional (becomes binding) upon the failure of another Agreement for the same property.
BALANCE Often as in "balance due", the amount of principal on a loan remaining to be paid at any given time.
BALANCE SHEET A financial statement that shows an individual's assets, liabilities, and net worth as of a specific date.
BALLOON LOAN A loan that has level monthly payments that will amortize it over a stated term (e.g., 30 years) but that requires a lump sum payment of the entire principal balance at the end of a shorter term (e.g., 10 years).
BALLOON PAYMENT The final lump sum payment that is made at the end of the shorter term for a balloon loan and pays the loan in full.
BANKRUPT A person, firm, or corporation that is financially unable to pay debts when due. The debtor seeks relief through a court proceeding to work out a payment schedule or erase debts. In some cases, the debtor must surrender control of all assets to a court-appointed trustee.
BANKRUPTCY A proceeding in a federal court in which a debtor who is financially unable to pay debts when due seeks relief to work out a payment schedule or erase debts.
BASIS POINT One 100th of 1%.
BENEFICIARY A person or corporate entity entitled to receive money or assets from a trust or an estate under a will.
BIANNUAL Or semiannual. Occurring every six months or twice per year.
BID An offer of a certain amount of consideration.
BI-LEVEL A description of a house with two levels, where the main entrance to the house is between the two levels.
BILL OF SALE A written document that transfers title to personal property from seller to buyer.
BINDER 1. A written commitment from an insurance company to insure a property or a certain risk; or
BIWEEKLY PAYMENT LOAN A loan 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 loan, and they are usually drafted from the borrower's bank account. The result for the borrower is faster amortization leading to substantial interest savings from faster principal reduction.
BLANKET MORTGAGE Where one loan is secured against more than one parcel of land.
BOILER PLATE A standard clause or provision in a contract which appears in all similar contracts.
BONA FIDE Made in good faith, at fair market value, without deceit or fraud.
BOND An interest-bearing certificate of debt with a maturity date. A real estate bond is a written obligation usually secured by a mortgage or a deed of trust.
BORROWER (MORTGAGOR) The person or company that receives money from a lender (often a bank, credit union or trust company) in exchange for a written promise to pay and a registered lien on property.
BREACH A violation of terms of any legal obligation.
BRIDGE FINANCING Also known as a " swing loan ", a loan used to fill a gap in financing, often between the purchase of a new home and the sale of the old one. If the purchase closes before the sale, the home owner needs to borrow enough money to pay for the new house for the period of time before the equity in his old house comes available as a result of the completion of the sale.
BREAK EVEN POINT Point at which total income equals total expenses.
BRIDGE LOAN A type of mortgage financing between the termination of one loan and the start of another loan. For example, a mortgage secured by the borrower's present home (which is usually up 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 a " swing loan ."
BROKER A person who is normally licensed by the state and who, for a commission or a fee, assists in negotiating a real estate transaction or negotiating the terms of a home loan. See mortgage broker .
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.
BUILDING CODE Set of regulations established by a municipality to govern the standards of construction in that municipality.
BUILDING LINE OR SETBACK The minimum distance a building or other improvement may be constructed from a property line. May be established by agreements, title documents or municipal by-laws or ordinances.
BUILDING PERMIT A document obtained from the local government, allowing for the construction of a structure in accordance with the terms of the permit.
BUILDING RESTRICTIONS Limiting rules which may appear in building codes or in title documents which control the size, placement, materials, design or location of new construction.
BUILT-INS Items which could be chattels but which are installed so as to form part of a building.
BUSINESS DAY A day in which normal business is transacted. Generally, Monday to Friday but not weekends or holidays.
BUYDOWN ACCOUNT An account in which funds are held so that they can be applied as part of the monthly loan payment as each payment comes due during the period that an interest rate buydown plan is in effect. For example, if a seller agrees to help reduce a buyer's monthly payment during the first year of a loan, the seller may put money in a buydown account which is then paid to the lender each month to reduce the buyer's monthly payment. This is more commonly done through a buydown paid directly to the lender at closing.
BUYDOWN A temporary buydown gives a borrower a reduced monthly payment during the first few years of a home loan and is typically paid for in an initial lump sum made by the seller, lender, or borrower. A permanent buydown is paid the same way but reduces the interest rate over the entire life of a home loan. |