B” or “C” loans: The credit industry term used to describe loans that reflect less than the best possible interest rate, terms and conditions. Consumers with negative or derogatory credit may be offered “B” or “C” loans. These loans always impose a higher interest rate and fees. See SubPrime & Alt A loans

Balance: The amount owed to a creditor on a specific date. This is also called a principle balance. Balance: The amount of money you have in your account.

Balance transfer: Essentially this is “robbing Peter to pay Paul” or “Musical Money”. It is paying a specific lender or credit card balance with funds borrowed from another lender or credit card company. Many times the lender providing the balance transfer will charge you a fee to do this. That fee can drastically increase the amount of interest that you might be saving with the transfer. If you are opening new accounts to pay off other accounts read the fine print as this is hard on your credit scores

Balloon Mortgage: A mortgage with periodic installments of principal and interest that do not fully amortize the loan. The balance of the mortgage is due in a lump sum at a specified date, usually at the end of the term.Balloon/reset mortgages may be a good choice for homebuyers who don’t expect to own their home past the maturity date of the balloon note: 5 or 7 years, for example. At the end of that time, you either sell your house or refinance.

Balloon Notes: Real estate loans where some portion of the debt will remain unpaid at the end of the loan term. Second trust deeds, for example, are frequently short-term loans (three to five years) where a single large payment is due when the loan ends. Often used with investment property in cases where buyers want low monthly payments and do not need a long term loan.

Balloon Payment: The unpaid principal amount of a mortgage or other long-term loan due on a specified date in a lump sum.

Bank: A Federally regulated financial institution that makes loans, cashes and pays checks, accepts deposits and provides other financial services.

Bankruptcy: Asprotection from creditors a person, business, or corporation who, through a court proceeding, is relieved from the payment of all debts or the debt is reorganized for future payment. All assets are surrendered to a court-appointed trustee. Bankruptcies remain on your credit report for ten years after the filing date. Credit counseling is available to help prevent bankruptcy.

Bankruptcy may be declared under one of several chapters of the Federal bankruptcy codes:

Chapter 7 which covers liquidation of bankrupt individuals or businesses

Chapter 11 which covers reorganization of bankrupt businesses;

Chapter 12 which covers certain farm bankruptcies;

Chapter 13 which covers repayment of debts by individuals.

Bankruptcy discharge: The order of the Court to allow for the Court’s protections sought in filing a bankruptcy. Bankruptcies remain on the credit reports for ten years after they are filed.

Base Price: The cost of a vehicle or a new home under construction without any options or upgrades. Those options can greatly increase the price.

Basis Point: One-hundredth of one percent. In loans, this is used primarily in discussion of the changes in yield or price on debt instruments, including mortgages and mortgages-backed securities.

Binder, Insurance: Written evidence of temporary hazard or title insurance coverage. The period of coverage is for a limited time and must be replaced by a permanent policy.

Biweekly Mortgage: A mortgage loan that schedules payments every two weeks rather than the traditional once a month payment schedule. If you pay your mortgage on a bi-weekly basis you will pay down the loan at a faster pace. This can save thousands off the interest cost of the loan. Beware lenders or companies soliciting you to sign up for this mortgage plan as the fee for doing this can be quite high and making additional principle payments (a payment above and beyond what is required by the lender on a monthly basis) may accomplish the same goal.

Blanket Mortgage: A mortgage on more than one property using just one loan. An example of this is a mortgage covering all the lots for the builder of a subdivision.

Blue Book: Also known as the Kelly Blue Book, it is a guide that reports what the going prices being paid for a specific year and model of cars being sold in the wholesale and retail markets.

Bond: An interest-bearing certificate of debt with a maturity date, such as an obligation of a government or corporation. A real estate bond is a written obligation secured by a mortgage or deed of trust.

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

Break-Even Point: The figure at which occupancy income is equal to all required expense and debt service. This is used to determine the amount of cash flow to necessary to operate a residential or commercial property.

Bridge Loan/Financing: An interim loan that provides funding prior to placing of a permanent loan.

Broker: A licensed real estate professional, either human or a corporation. That entity may employee licensees and other brokers who assist buyers or sellers in the purchase, sale, or management of real property.

A real estate agent’s duties may include determining market values, advertising properties for sale, showing properties to prospective purchasers, assisting in the preparation of contracts, advising clients with regard to the acceptance or rejection of an offer or counter-offer, and dealing with a wide variety of related matters.

Other real estate agents may work in the mortgage industry as loan officers or loan agents. Real estate agents, as well as loan agents, or loan officers are commonly called brokers in conversation; however the above is the legal definition.

Broker Premium: A fee paid to a broker for origination and closing of a real estate loan.

Budget: An itemized list of all expenses. Budgets are tools commonly used to measure or gauge expenses and their relation to income.

Building Code: The laws and regulations regarding construction and retrofitting of real estate. They vary from state to state but all must meet the minimum standard required for the Uniform Building Code.

Buy-Down: A buy-down is prepaid interest on a loan made to purchase a property. It can be paid by the seller, the lender, or the borrower. The effect of a buy-down is that the borrower can make a smaller payment on the loan each month and the buy-down funds are used to supplement the payments during the buy-down period. Buy-downs can be used for fixed or adjustable rate mortgages.

Buyer’s Broker: A real estate professional representing the buyer in a real estate transaction.