B

Bad Credit
A negative rating from the credit reporting agencies. Many factors can contribute to someone getting a "bad credit" rating, among these are non-payment of an account or late payments over an extended length of time. Whether non-payment of an account is willful or due to financial hardship, the result can be the same, a negative rating. However, lenders are more willing to work with individuals if the person contacts the lender to let them know they are having problems meeting their commitment to pay.

Balance
1. An amount of money you owe, such as the balance on your credit card, mortgage, or auto loan.
2. An amount of money you own, such as the balance in your checking or savings account

Balance Sheet
A listing of assets, liabilities, and net worth as of a particular date. "Balance" refers to the fact that assets equal liabilities plus net worth.

Balance Transfer
The process of moving an unpaid credit card debt from one creditor to another.

Balance Transfer Fee
A fee charged for transferring an outstanding balance from one creditor to another.

Balloon
Loan in which little, if any, of your monthly payments go toward paying off the outstanding balance. Rather, one large, lump-sum payment is due at maturity.

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 Mortgage
A mortgage with periodic installments of principal and interest that, at the end of such a period, do not fully amortize the loan. The balance of the mortgage due is usually paid in a lump sum at a specified date, usually at the end of the term of such periodic installments.

Balloon Note
A note that usually calls for a final payment greater than that of the regular periodic payments.

Balloon Payment
The unpaid, principal amount of a mortgage loan that is due on a specified date, and paid in a lump sum at the end of the term

Bank
A commercial institution licensed as a taker of deposits, banks are mainly concerned with making and receiving payments, and supplying short-term loans to private individuals.

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 court proceeding in which a debtor is relieved of debt liability, in whole or in part, depending on the type of bankruptcy filed. There are two primary filings: a Chapter 7 bankruptcy declaration allows for the liquidation of assets and the discharge of most debts; a Chapter 13 bankruptcy allows a borrower with a steady income to pay off bills over a 36- to 60-month period. A person is declared bankrupt, when found to be legally insolvent and the person's property is distributed among c reditors or otherwise administered to satisfy the interests of creditors.

Basis Point
One hundredth of One percent (.01%).

Beneficiary
One who receives or is designated to receive assets from a will, insurance policy, trust, retirement plan, etc.

Bequeath
To transfer property to named heirs through a will.

Billing Cycle
The number of days between the last credit card statement date and the current statement date.

Billing Error
Any mistake in your monthly statement as defined by the Fair Credit Billing Act.

Billing Statement
The monthly bill sent by a creditor. It gives a summary of activity on an account, including balance, purchases, payments, credits, and finance charges.

Bill of Sale
A written document that transfers title to personal property from seller to buyer.

Binder
A preliminary agreement secured by the payment of earnest money under which a buyer offers to purchase real estate.

Biweekly Mortgage
A mortgage on which the borrower pays half the monthly payment every two weeks, resulting in a total of 13 annual mortgage payments and an accelerated amortization.

Blanket insurance policy
A single policy that covers more than one piece of property (or more than one person).

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

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
One who receives funds with the expressed or implied intention of repaying the loan in full.

Breach
A violation of terms of any legal obligation.

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.

Broker
A person or firm that charges a fee or commission to act as an intermediary between buyers and sellers of securities or property.

Broker Premium
Premium paid to mortgage broker as the "middleman" in the mortgage process between the lender and the borrower. Lenders offer brokers wholesale rates; brokers add a surcharge to cover the cost of underwriting to arrive at the rates charged to borrowers.

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
Local regulations that specify minimum structural requirements for design of, construction of, and materials used in a home or office building. Building codes are based on safety and health standards.

Building Line or Setback
Distances from the ends and/or sides of the lot beyond which construction may not extend. The building line may be established by a filed plat of subdivision, by restrictive covenants in deeds or leases, by building codes, or by zoning ordinances.

Buydown
Money advanced by an individual (Seller, etc.) to reduce the monthly payments for a home.

Buydowns
Mortgage in which the rate is offset by paying more points up front.