Balloon Mortgage

This is a mortgage requiring the remaining principal balance be completely paid off on a specified date in the future. As an example, a loan could be set up on a 30 amortization payment amount, however, the payoff date could be established at the end of the seventh year of mortgage payments; at which time the entire balance of the loan is due.

Balloon Payment

This is the final payment for a balloon mortgage that must be paid in full on a specified date.

Bankruptcy

A legal procedure where an individual or individuals can restructure or eliminate debt and other financial obligations. A bankruptcy is listed as a specific type by number with the most common bankruptcy type for individuals is named the "Chapter 7" bankruptcy. This eliminates most borrower debt for the individual. However, following a bankruptcy, an individual(s) borrower will not typically qualify for a high quality loan (called an 'A paper loan') for two years after completion of the bankruptcy.

Bill of Sale

This is a written document transferring a property title another party. A common example is the sale of an automobile. Lenders will require a bill of sale proving that a transaction occurred prior to loaning funds to pay for the vehicle.

Biweekly Mortgage

This is a mortgage where the borrower makes payments every two weeks, rather than the more common monthly mortgage payment. The borrower will then make thirteen payments during a calendar year. This additional payment will reduce the principal owed and reduces the time for paying off the mortgage. There are several companies in the mortgage industry that will create a biweekly payment program for a borrower. This service includes paying up front to establish the services and a transfer of funds fee for each biweekly payment. The payments are deposited into a trust account, then the additional funds are used to make the add-on payment at the end of the year, and that amount will be credited to the principal. A borrower can avoid the additional fees by simply making extra payments toward principal on a monthly basis.

Bond Market

This is a transaction market that includes the purchase and sale of thirty year treasury bonds on a daily basis. As bond prices fluctuate, the price of fixed rate mortgages will go up or down, so lending institutions track the bond market very closely. The price fluctuations influencing the Treasury Bond market influence mortgage rates. As a result, mortgage rates can change daily, occasionally changing within a business day, reflecting volatility in the market.

Bridge Loan

A bridge loan is used by individuals who are in the process of purchasing a property, but have not sold another property (typically a home) that is available for sale. The bridge loan is used for making down payment on the newly purchased property. This type of loan is no longer popular because lenders will make second mortgage loans available to accomplish the same goal.

Broker

In the real estate business most realtors are actually agents of a firm, working under the license of a real estate broker. An agent may also be a broker, either self employed or working for another broker. Within the mortgage industry, a broker usually is typically an individual or firm that does not lend money for real estate loans, but will broker loans to a lending institution, like a mortgage company. A broker is usually considered to be anyone acting as an agent who is paid to arrange for parties to come together for a business transaction.

Buydown

This terms refers to a a fixed rate mortgage where the original interest rate is said to be "bought down" for a period of time (usually a temporary time span); typically a period of time from one to three years in duration. After the buydown period , the payment is calculated at the original loan rate. For a buydown to occur a sum of money is paid, then held in a special account that is used to additional funds to the monthly payments. Ordinarily the extra funding is provided by the seller as a financial incentive to encourage the sale of a property. Another buydown is called a "lender funded buydown." This occurs when the lender pays the initial buydown amount. The lender can do this because the rate on the note rate for the loan, following the buydown adjustments, will be at a higher rate than current market rate. This can assist the borrower in qualifying for a a higher loan amount for a property purchase. Also, the buydown is used when a borrower expects an increase in earnings, but needs to make lower payments upon initial purchase.