Balloon Mortgage
A mortgage loan that requires the remaining principal balance be paid at a specific point in time. For example, a loan may be amortized as if it would be paid over a thirty year period, but requires that at the end of the tenth year the entire remaining balance must be paid.

Bankruptcy
By filing in federal bankruptcy court, an individual or individuals can restructure or relieve themselves of debts and liabilities. Bankruptcies are of various types, but the most common for an individual seem to be a "Chapter 7 No Asset" bankruptcy which relieves the borrower of most types of debts. A borrower cannot usually qualify for an "A" paper loan for a period of two years after the bankruptcy has been discharged and requires the re-establishment of an ability to repay debt.

Beneficiary
The person who receives or is to receive the benefits resulting from certain acts. Example: The lender is named as the beneficiary on a mortgage loan.

Bill of Sale
A written document that transfers title to personal property.

Binder
(1) A title insurance binder is the written commitment of a title insurance company to insure title to the property subject to the conditions and exclusions shown on the binder.
(2) Preliminary agreement, normally secured with earnest money, between a buyer and a seller as an offer to purchase real estate.

Bi-Weekly Mortgage
A mortgage in which you make payments every two weeks instead of once a month. The basic result is that instead of making twelve monthly payments during the year, you make thirteen. The extra payment reduces the principal, substantially reducing the time it takes to pay off a thirty year mortgage.

Blanket Mortgage
A mortgage covering more than one piece of property.

Bond
(1) A debt instrument in the capital markets. The U.S. government, corporations and municipalities use bonds to raise money. Bonds can also be backed by mortgages. The best known bond is the 30-year treasury bond issued by the U.S. government.
(2) A sum of money given to a court to guarantee against a loss. For example if there is a lien on a property, the owner may remove the lien by posting a bond.

Bond Market
Usually refers to the daily buying and selling of thirty year treasury bonds. Lenders follow this market intensely because as the yields of bonds go up and down, fixed rate mortgages do approximately the same thing. The same factors that affect the Treasury Bond market also affect mortgage rates at the same time. That is why rates change daily, and in a volatile market can and do change during the day as well.

Borrower
A person (also known as mortgagor) who receives funds in the form of a loan with an obligation to repay principal with interest.

Bridge Loan
A short-term interim loan. Bridge loans are commonly used to close a transaction on one property while another is being sold.

Broker
As it relates to the real estate, a mortgage broker does not lend money, but acts as an agent between the borrower and the lender to secure financing. A broker can often be a more effective means for securing a loan because he or she is able to "shop" for the best rate and term available from several different lending sources at one time, something that would take a borrower much longer to do on his or her own. Brokers earn a profit for this service usually expressed as "points" on a loan.

Buy down
Money advanced by an individual (builder, seller, etc.) to reduce the monthly payments for a home mortgage either during the entire term or for an initial period of years. A "2-1" Buy down can be used to qualify a borrower who otherwise may not qualify for a loan by reducing the interest rate on the first two years of payments, thereby making the mortgage more affordable.

Buyer's Agent
A real estate agent hired by a buyer to locate a property for purchase. The broker represents the buyer and negotiates with the sellers broker for the best possible deal for the buyer. Buyer's Agents do not charge for their services; they split the commission with the seller's Listing Agent instead as compensation for their assistance in selling the property.

Buyers' Market
Market conditions that favor buyers i.e. there are more sellers than buyers in the market. As a result buyers have ample choice of properties and may negotiate lower prices. Buyers markets may be caused by an economic slump or overbuilding.