Glossary -B-

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balance sheet: A financial statement that shows assets, liabilities, and net worth as of a specific date.

balloon mortgage: A mortgage or loan that has level monthly payments that will amortize it over a stated term but that provides for a lump sum payment to be due at an earlier predetermined time.

balloon payment: The final lump sum payment that is made at the maturity date of a balloon mortgage.

bankrupt: A person, firm, or corporation that, through a court proceeding, is relieved from the payment of all debts after surrendering all assets to a court-appointed trustee.


bankruptcy: A proceeding in a federal court in which a debtor who owes more than his or her assets can relieve the debts by transferring his or her assets to a trustee.


before-tax income: Income before taxes are deducted.

beneficiary: The person designated to receive income from a trust, estate, or a deed of trust.

bill of sale: A written document that transfers a piece of personal property from a seller to a buyer.

binder: A preliminary agreement, normally accompanied by the payment of an earnest money deposit, under which a buyer offers to purchase real estate.


biweekly payment mortgage: A mortgage that requires payments to reduce the debt every two weeks (instead of the standard monthly payment schedule). The 26 (or possibly 27) biweekly payments are each equal to one-half of the monthly payment that would be required if the loan were a standard 30-year fixed-rate mortgage, and they are normally drafted from the borrower's bank account. The borrower benefits by a substantial savings in interest.

blanket mortgage: The mortgage that is secured by a cooperative project, as opposed to the share loans on individual units within the project.

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

breach: A violation of any legal obligation.

bridge loan: A form of second trust that is usually collateralized by the borrower's present home (which is usually for sale) in a manner that allows the proceeds to be used for closing on a new house before the present home is sold. Also known as "swing loan."

broker: A person who, for a commission or a fee, brings parties together and assists in negotiating contracts between them.

building code: Local government regulations that outlines standards and requirements for any building or construction.

buydown mortgage: A temporary buydown on a mortgage is achieved by paying a lump sum at the closing to lower the initial interest rate and resulting payments on a mortgage.

buyers' market: A situation, primarily dictated by economic conditions, when the supply of homes for sale exceeds demand resulting in more negotiating power for the buyer.

YOUR FRIENDLY COLORADO MORTGAGE BROKER SINCE 1977