Mortgage Glossary

Bankrupt - A person, firm, or corporation that, through a court proceeding, is relieved from the payment of all debts after the surrender of 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 the income from a trust, estate, or a deed of trust.

Bequeath - To transfer personal property through a will.

Betterment - An improvement that increases property value as distinguished from repairs or replacements that simply maintain value.

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

Binder - A preliminary agreement, secured by the payment of an earnest money deposit, under which a buyer offers to purchase real estate.

Blanket Insurance Policy - A single policy that covers more than one piece of property (or more than one person).

Bona Fide - In good faith, without fraud.

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.

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

Budget - A detailed plan of income and expenses expected over a certain period of time. A budget can provide guidelines for managing future investments and expenses.

Budget Category - A category of income or expense data that you can use in a budget. You can also define your own budget categories and add them to some or all of the budgets you create. "Rent" is an example of an expense category. "Salary" is a typical income category.

Building Code - Local regulations that control design, construction, and materials used in construction. Building codes are based on safety and health standards.

Buy Down Account - An account in which funds are held so that they can be applied as part of the monthly mortgage payment as each payment comes due during the period that an interest rate buy down plan is in effect.

Buy Down Mortgage - A temporary buy down is a mortgage on which an initial lump sum payment is made by any party to reduce a borrower’s monthly payments during the first few years of a mortgage. A permanent buy down reduces the interest rate over the entire life of a mortgage.