FHA Loan and Mortgage Glossary - Terms Beginning with 'B'
Back-up Offer: This is a reassurance for the seller that they have more than one offer and if the original buyer offer does not get their loan or pulls out of the deal then the seller know there is a second offer waiting.
Balance: The amount that is due to pay off the loan. This is the original loan amount minus all principal payments and interest due to date.
Balloon Mortgage: This is a type of mortgage loan that has a fixed interest rate for a set period of time, and once that time is expired the entire balance of the loan is due. This type of loan is usually good for people who do not plan to stay in the home for long or who plan to refinance before the balloon payment is due.
Bankruptcy: This is a legal proceeding to relieve debt for companies or people who can not pay their debt. Bankruptcy should be last resort considering it stays on your credit report in a negative manner for a full 10 years.
Base Loan Amount: This is the total amount of the loan that includes any fees, closing costs, or other funds that were need.
Bequest: When property is gifted to a person from a will or estate it is a bequest.
Bi-Monthly Mortgage Payments: This is when the borrower pays half of their mortgage payment every two weeks instead of one large payment once a month. This helps by not paying a full month of interest on the full amount owed which can lead to paying off the loan many years earlier.
Blanket Mortgage: This is the type of mortgage that covers more than one piece of property. If a borrower wants to purchase multiple properties they can all be financed into a blanket mortgage in order to avoid multiple closing cost and loan fees.
Borrower: Also called the Mortgagor this is the person who the lender gives money to for the purchase of a home.
Bridge Loan: This type of loan allows a person to purchase a home they want before they have sold their existing home. The loan incorporates the payments for the new mortgage and the old mortgage and makes it affordable for the borrower until their previous home sells. This type of loan helps people who have found the home they want to purchase so that they do not have to wait until they sell their home and miss the opportunity for the home they want.
Broker: This is a person who will take the loan information from a borrower and shop around to many different mortgage lenders to find the best deal for the borrower. Be careful because brokers are paid commissions and they may not show the borrower the best deal in all cases. Also make note that the borrower pays their fee at mortgage loan closing time.
Budget: This is the amount of money a person can afford to pay for living expenses and other needs based on a person’s debt and their income. Budgets are important when a person is trying to determine how much of a monthly mortgage payment they can afford.