Mortgage glossary

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Balance: the amount you owe, after taking payments (credits) and any debits into account.

Balloon Mortgage: a mortgage that typically offers low rates for an initial period of time (usually 5, 7 or 10) years; after that time period elapses, the balance is due or is refinanced by the borrower. FFI mortgage glossary.

Balloon Payment: the final lump sum payment due at the end of a balloon mortgage.

Bank of England base rate: the Bank of England 'repurchase' or 'repo' rate which is main factor influencing interest rates charges by lenders.

Bankruptcy: a federal law Whereby a person's assets are turned over to a trustee and used to pay off outstanding debts; this usually occurs when someone owes more than they have the ability to repay. FFI mortgage glossary.

Bill Of Sale: a written document which transfers titles to personal property, such as an automobile or other valuable property.

Binder: once earnest money is put down toward the purchase of a home this agreement holds the home while the proper inspections and appraisals are conducted.

Borrower: a person who has been approved to receive a loan and is then obligated to repay it and any additional fees according to the loan terms.

Bridge Loan: a loan used (usually) to finance the down payment on a new home before the previous property is sold. Previously commonly available, bridge loans are hard to find and are expensive. FFI mortgage glossary.

Broker: a person or company that, for a specified fee, provides a service. Real estate brokers bring together buyers and sellers and then facilitate the transaction. Note: most real estate brokers represent the seller, NOT the buyer. Mortgage brokers are individuals or companies which arrange financing but do not lend money directly. FFI mortgage glossary.

Brokers Fee: a fee charged by an intermediary or advisor for locating the most appropriate mortgage for the borrower.

Building code: based on agreed upon safety standards within a specific area, a building code is a regulation that determines the design, construction, and materials used in building.

Buildings insurance: covers the house you are buying against damage - take it out from the day you exchange contracts. FFI mortgage glossary.

Budget: a detailed record of all income earned and spent during a specific period of time.

Bundle Of Rights: your rights as a property owner.

Buy down: a provision where someone, usually the builder or seller, subsides the mortgage, either by paying extra points or by setting up an escrow account with funds to subsidize the loan during the first few years. The effect is to lower the interest rate for some period of time, which in turn allows the borrower to qualify. The reduced monthly payments increase when the subsidy expires. FFI mortgage glossary.

Buy to Let: a mortgage meant for those who wish to purchase a property to rent out to others. The decision on whether you are able to repay this type of mortgage is often based up on the future rental income from the property rather than the personal income of you the borrower.