|
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 |
|
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 |
|
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 |
|
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 |
|
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 |
|
Benchmark |
A permanent
reference mark made on a piece of property for the sake of
surveyors |
|
Beneficiary |
The person named to
receive income from a trust, an estate, or a deed of
trust |
|
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 |
|
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 |
|
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 |
