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Back ratio |
The ratio of monthly housing costs (principal,
insurance, taxes, and interest) plus regular monthly payments to
gross monthly income, used by the lender to evaluate an
applicant's qualification for a loan; typical back ratios are
between 32 - 45 percent |
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Balloon mortgage |
A mortgage with level monthly payments over a
stated term, but which requires a lump sum payment in full 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, which is larger than
preceding regular payments |
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Bankruptcy |
A legal proceeding in a federal court in which a
debtor who owes more than the total of his or her assets can
surrender those assets to the Bankruptcy Court, thereby being
relieved of the future obligation to repay his or her unsecured
debts; a Trustee in Bankruptcy administers the assets, selling
them to pay as much of the debt as possible |
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Bargain and sale deed |
A deed that carries with it no warranties
against liens or other encumbrances, but which implies that the
grantor has the right to convey title |
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Basis |
The financial interest an owner of an investment
property has, as determined by the Internal Revenue Service, in
order to determine annual depreciation and gain or loss on the
sale of the asset Adjusted Basis: When property is purchased,
the owner's basis is calculated to be the property cost plus the
value of any capital expenditures for improvements made, minus
any depreciation taken |
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Benchmark |
A permanent reference mark made on a piece of
property for the sake of surveyors |
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Beneficiary |
The person named to receive income from a trust,
an estate, or a deed of trust |
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Bequeath |
To gift or transfer personal property to another
party, executed via a will |
|
Betterment |
An improvement to property that increases its
value, as opposed to repairs or changes that maintain its value
only |
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Bid |
A financial offer to purchase a property |
|
Binder |
A preliminary agreement for the purchase of real
estate, secured by the payment of an earnest money deposit which
evidences the purchaser's good faith and intent to complete the
purchase |
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Blanket loan |
A mortgage covering more than one parcel of real
estate, which provides for each individual parcel's partial
release from the mortgage upon repayment of a portion of the
debt |
|
Bond |
A written financial obligation, usually secured
by a mortgage or a deed of trust, and often posted with the
Court, to guarantee against loss incurred with a potential claim |
|
Breach |
Failure to follow through on a contractual
promise or legal obligation |
|
Bridge loan |
A form of second trust, collateral for which is
the borrower's present home, usually taken on to allow the
proceeds from the sale of the borrower's present home to be used
to close on a new home, before the previous home is sold |
|
Broker |
An intermediary who assists in negotiating
contracts between two or more parties, for a fee; in real
estate, a broker is licensed to assist in the purchase, selling,
rental or managing of real estate; the broker's services will
vary, depending on whether he or she is employed by the seller
or the buyer |
|
Building code |
An ordinance that specifies minimal standards
for construction, alteration, or demolition of a building, set
for the sake of safety |
|
Building Restriction Line (or "Set-back") |
The minimal distance from the road where a
building may be positioned, which appears in the original plat
of subdivision, restrictive covenants, or in zoning ordinances
and building codes |
|
Bureau of Land Management |
The branch of government responsible for the
surveying and management of public lands |
|
Buy-back agreement |
A written agreement which specifies the
conditions under which the seller is allowed to repurchase the
property, usually restricted to a certain period of time and to
a price stated in the agreement |
|
Buydown |
When the lender or home builder lowers the
interest rate on initial payments on a loan, often for the first
few years, allowing a borrower whose income is expected to
increase in subsequent years to qualify for a loan they
otherwise are currently not qualified for |
|
Buyer-agency agreement |
When the broker is the agent for the buyer and
is financially obliged to the buyer |
|
Buyer's market |
When the real estate buyer is at advantage
because there is more supply of houses or real estate available
for sale than there is demand, thus lowering prices |
