Mortgage Glossary
There are a lot of unfamiliar terms that get tossed around during the mortgage process. But don't worry, we've put together this glossary to help you get a better grasp of any terms that may be less than clear.
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Backfill
The replacement of excavated dirt into a hole, crevice or against a structure such as a foundation.
Backup Contract
A contract to buy property that becomes effective if a prior contract fails to be agreed upon.
Balance Due at End of Loan Term
Some home equity loans may have a balance due at the end of the loan term. This means that if you make the minimum monthly payment during the life of the loan the entire balance will not be paid in full. A "balloon" payment will be due at that time.
Balance Sheet
A financial statement in a table form that shows assets, liabilities and net worth.
Balloon Mortgage
A short-term fixed-rate loan which involves smaller payments for a certain period of time and one large payment for the entire balance due at the end of the loan term.
Balloon Payment
The final payment that is made at the maturity date of a balloon mortgage and pays the loan in full.
Bankrupt
A person, company, or corporation that, through formal court proceeding, is relieved from the payment of all debt after the surrender of some or all assets to a court-appointed trustee.
Bankruptcy
A court proceeding in which a debtor, who owes more than his assets, can relieve the debts by transferring his assets to a trustee.
Before Tax Income
Income before deducting taxes.
Beige Book
A survey of economic conditions, conducted in the Federal Reserve’s 12 regional banks, in preparation for Federal Open Market Committee meetings. Frequency: twice per quarter. Source: Federal Reserve.
Beneficiary
The person designated to receive the benefits resulting from certain acts.
Bequeath
To transfer personal property through a will or last testament. Compare with devise.
Betterment
An improvement that increases property value as opposed to repairs or replacements that simply maintain value.
Bi-weekly Payment Mortgage
A mortgage that requires payment to reduce the debt every two weeks instead of monthly. The 26 (sometimes 27) biweekly payments are each equal to one-half of the monthly payment that would be required with a standard 30 year fixed-rate mortgage. The result is a faster loan balance reduction with substantial savings in interest.
Bill of Sale
A written instrument that transfers title to personal property.