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.
A
Attorney Witness
Related to the settlement/closing fee. This fee is standard in some states and is the closing attorney's fee for witnessing the signing of the closing documents. For our comparison purposes, an attorney witness fee is considered to be a third party fee and may be included in the title insurance or closing fee by some lenders.
Attorney-in-fact
One who holds a power of attorney from another to execute documents on behalf of the grantor of the power.
B
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.