It is a short term payment with mortgage payments too low to pay off the balance in the specified time. This loan thus requires payment in full usually a lump sum amount, payable earliear than the normal amortization period by paying the balance in a shorter period of say 5-7 years. For eg. The amortization period can be 30 years, but the payment will be required to be paid in full at the end of a 5 or 7 or 10 year period through a lump sum or balloon payment.
The last and final balance amount of a loan that is paid at the end of a balloon mortgage is called a balloon payment.
It is a leagally declared inability of an individual or organization to pay their creditors. Bankruptcy is filed in a Federal Court. Bankruptcies are of various types. The most common one however, is the 'Chapter 7 No Asset' bankruptcy which relieves the individual/borrower of his debts and liabilities. The borrower remains ineligible for an 'A' paper loan for a period of two years after the bankruptcy has been discharged. He is also required to re-eatablish the ability to reapy debt.
A bridge loan is the short term source of funds needed to pay for purchase of new property when you have not yet sold your previous property. Thus a bridge loan is taken out to supplement this shortfall in cash reserves for a downpayment. To qualify for this, the borrower must have a contract to sell the exisitng house. It is also known as the swing loan. Bridge loans are not used very often now as the second mortgage lenders lending at high value loans are increasing and sellers prefer offers from buyers who have already sold theri property.
A professional who is in the business of bringing two parties together and assisting in arranging funds, negotaiting contracts for the clients. He does not lend the money himself but instead earns a fee or commisssion for every transaction that he conducts. Brokers have different meanings for different situations. Realtors are agents who sometimes do their own broking or often work under brokers.
It is the term used when the lender brings down the rate of interest on the fixed rate mortgage for a temporary period. For the balance period the borrower's payment is calculated at note rate. In order to facilitate this, a lump sum payment is made and kept in an account which helps to supplement the borrower's monthly payments. These funds are sourced out from the seller or elsewhere as an incentive to buy their property. When the initial sum is paid by the lender, it is called the 'lender funded buydown'. This is possible because the note rate on the loan, tafter taking into consideration all adjustments, is higher than the exisitng market rate. The reason for doing this is that it will help in getting the borrower to qualify for the start rate and thus for a higher loan amount. Also, the borrower maybe expecting his earnigns to increase considerably in the future but would prefer a lower payment right now.
A ratio that indicates what portion of a person's monthly income goes toward paying debts, mortgage, credit cards, car payments, student loan. Traditionally, lenders were loath to extend borrowers' back-end ratios past 36 percent, but they often do now. Lenders use this ratio in tandem with the front end ratio to approve mortgages. This is also known as a debt to income ratio.
Back to back escrows
A closing arrangement that is set up so that the buyer can finalize the purchase of one property and the sale of another simultaneously.
A bid for a property that the owner will consider if the current transaction falls through. If your bid for a house comes in second, be sure to make a backup offer. This will put you in line if the first offer falls through.
the dollar amount that is left to be paid on a loan.
A long-term loan in which the payments aren't set up to repay the loan in full by the end of the term. This loan has one large payment due when the loan matures. The type of loan often has a low interest payment. The major disadvantage with this loan is the borrower needs to be disciplined in preparation for the large single payment.
The transferring or purchasing of property or an item for less than market value.
Base loan amount
The initial loan amount upon which loan payments are based. Other charges, such as interest may be added to the initial amount during the lifetime of the loan.
A suburban community in which the residents commute to the city to work. These communities do not support their own employment centers for its residents so the people are said to only sleep there after commuting to a larger city to work the majority of the time. Often, people chose to live in one of theses communities because of affordability, good schools, and low crime rates.
Multiple and offers made in order to compete for a piece of property or item that escalates the price. A bidding war can happen over real estate, a business, a corporation, Hollywood movie scripts, or smaller items. This is usually great news for the seller as they will make out with a much higher price than originally anticipated.
Bill of Sale
the document that concludes the transfer of new property.
A mortgage that schedules payments every two weeks instead of the standard monthly payment. Typically your bank account ids debited every two weeks in the amount of half of your mortgage. In a normal mortgage you make 12 payments, on the biweekly repayment system you will be making 26 half payments a year. The 26 payments is equivalent to 13 monthly payments. This extra payment helps amortize your loan faster, which saves you money in interest.
A blanket mortgage is a loan which land developers most commonly use to purchase an area of land with the intention of dividing it into many separate lots for resale or development. Rather than mortgaging each lot separately, a blanket mortgage can be used to reduce costs and make the transactions more time efficient.
Board of equalization
A government agency, typically governed by each state that hears appeals of property classifications. People appeal to a board of equalization because they believe their property has been assessed too highly, which increases their property taxes unfairly.
An amount of money paid to a mortgage broker who has served as a middleman in the mortgage process between the lender and the borrower. Lenders offer brokers wholesale rates and brokers add a surcharge to cover the cost of underwriting.
The office of a broker who earns a commission from bringing together a buyer and a seller in real estate or mortgage lending.
In economics, a unsustainable increase in the price of certain products or assets, such as housing or stocks, based on mistaken assumptions about their underlying worth. By definition, bubbles are followed by sharp price declines when the bubble bursts, which is the difference between a bubble and a boom.
Refined features and amenities that builders offer for an extra charge.
Codes that architects, builders, and developers use that are in compliance with agreed upon safety standards in a specific area. A building code is a regulation that determines the design, construction, and materials used in building.
Items, such as appliances and cabinets, which are permanently attached to a building.
Bundle of rights
A common explanation explaining how rights pertaining to property are governed. This is a means of organizing and presenting confusing and often times, contradictory data.
An agent who represents the buyer and keeps the buyer's interests and fiduciary obligations in the buyer's best interest.
An agent whose duty it is to get the best possible price and terms for the buyer. This person must disclose all the material facts about the property, good and bad. He or she will also disclose personal facts, if given permission from the seller that will indicate if the seller will accept a reduced price.
A situation in the real estate market when sellers significantly outnumber buyers, driving prices down. This is historically a good time to buy your home. The conditions are constantly changing.
A buyer's second thoughts after buying a house or other major purchase, a feeling of anxiety or being overwhelmed by the thought of another financial responsibility.
B/C loan refers to the class of debt facilities provided to borrowers with less-than-optimal credit qualifications. B/C loans have higher interest rates and more restrictive terms due to the higher level of risk involved for the lender. A credit-challenged borrower can use a B/C loan to establish a reliable payment history, thus improving his or her credit profile.
Back title letter
A back title letter is an official document produced by a title insurance company that specifies the condition of a property's title (i.e., who owns the land, and if there any liens or restrictions exist) as of certain date.
A back-door trojan is malicious code or software that's hidden within another program. When the program is installed on a computer, the trojan code activates remote access to the system, so that a hacker can gain entry to the computer and its files. This remote access gives the hacker the ability to manipulate files and view confidential data, among other things.
Back-end load is a sales charge that's assessed when an investor sells mutual fund shares. These charges are usually structured to discourage frequent trading; the fee is highest in the first year of share ownership, and decreases as the shares are held for longer periods.
The back-end ratio is the percentage of an individual's (or household's) pre-tax, monthly income that's used to pay monthly debt obligations. Debt obligations include the mortgage payment, real estate taxes, mortgage insurance, and all credit account payments, including credit cards and car loans. The ratio is calculated by adding up the debt obligations and dividing the sum by the pre-tax monthly income.
Back-end ratio or back ratio
The back-end ratio is the percentage of an individual's (or household's) pre-tax, monthly income that is used to pay monthly debt obligations. Debt obligations include the mortgage payment, real estate taxes, mortgage insurance and all credit account payments, including credit cards and car loans. The ratio is calculated by adding up the debt obligations and dividing the sum by the pre-tax monthly income.
A back-to-back escrow is arranged so that a homeowner can sell one property and purchase another simultaneously. This arrangement is useful in cases where the homeowner can only carry one mortgage at a time. Back-to-back escrow allows for the transition from an existing mortgage on the property that's being sold directly to a new mortgage on the purchased property. Including a back-to-back escrow contingency in a home purchase offer makes the offer less appealing to the seller.
between two companies for the purpose of hedging against foreign exchange rate fluctuations. Two companies in different countries would borrow corresponding amounts from one another. A U.S. company, for example, would loan a specified amount in dollars to a Japanese company, and the Japanese company would loan the U.S. company an equivalent amount in yen.
Backup withholding is income tax collected on various types of 1099 income, including investment income. At the time the income is received, or when an investor withdraws funds from an investment account, the payer holds back a percentage of funds to ensure that the appropriate tax liability is paid when the tax becomes due after the close of the tax year.
Bad debt reserve
A bad debt reserve is a balance sheet account that estimates the amount of non-collectible debts that a company expects to experience.
Bad debt refers to funds owed to a creditor that aren't collectible. Debts are only classified as bad debt after all avenues of collection have been exhausted. From a business/balance sheet perspective, bad debt amounts are worthless, and usually written off. From a tax perspective, businesses and individuals are allowed to deduct bad debts under certain circumstances.
Bailing out is the process of providing funds to an individual or company that would otherwise become insolvent. The term can also refer to the act of selling a security impulsively at any price in a crashing market.
A balance sheet is a financial statement that represents a company's revenue-generating assets, as well as its liabilities and net worth. Balance sheets are used to evaluate a company's financial strength.
A balance transfer is the movement of a debt balance from one credit card account to another. Credit card companies often try to lure in new customers by offering low interest rates on balance transfers. There may be transaction fees associated with processing a balance transfer.
Balance transfer fee
A balance transfer fee is a charge assessed when a debtor moves a debt balance from one credit card account to another. The fee, often a percentage of the debt balance, is charged by the creditor that assumes the debt.
pursues a hybrid investing strategy. Balanced funds contain a mix of stocks, bonds, and other types of securities in order to offer investors both capital appreciation and income generation.
A balloon note is a type of long-term loan that defers a large part of the principal payoff until maturity. Balloon notes are characterized by low principal and interest payments during the life of the loan, and one large, final payment due at maturity.
A bank is a licensed, commercial entity that accepts and pays interest on deposits, and makes payments as directed by depositors, by way of check-writing and/or debit card usage. Banks may also make loans and provide various other financial services to individuals and businesses.
Bank credit is a financial institution's promise to advance funds, up to a certain limit, on behalf of an individual or business. Those funds may be repaid in the form of structured debt, or by way of funds held on deposit with the bank.
A bank discount is interest paid on a loan upfront. The total amount of interest due, based on projected repayment, is deducted in one lump sum from the initial distribution of the loaned funds. The bank discount is expressed as a percentage of the loan amount.
Bank holding company
A bank holding company is a commercial entity that owns or operates at least two banks or applicable financial services companies.
The bank rate is the interest rate that a central bank (e.g., the Federal Reserve) charges to lend money to its member banks. Changes to the bank rate affect the national money supply by encouraging or discouraging borrowing.
Bank Secrecy Act
The Bank Secrecy Act ("BSA") is legislation that requires financial institutions to document potentially suspicious, high-dollar depositor transactions. The legislation is intended to prevent, or at least discourage, money-laundering activities. The BSA is also known as the Currency and Foreign Transactions Reporting Act.
The bank spread is the difference between the bank's cost of funds, in terms of interest paid to depositors, and the rate the bank charges to debtors on bank loans.
Bank term loan
A bank term loan is a debt facility that's offered by a banking institution to a business. The bank term loan is characterized by a fixed maturity date and a loan life that's longer than one year. Repayments, which can be monthly or quarterly, most commonly involve some level of principal amortization prior to maturity.
The bank wire is an electronic system that banks use to transmit and receive account information and transaction requests from one another.
A banker's acceptance (also called bankers acceptance or BA) is an order to pay a sum of money at a certain date. The BA is created by a banking customer and provided to a third party. The third party presents the BA to the bank; when the bank "accepts" the BA, it is assuming responsibility to make the specified payment. The BA is now a bank-guaranteed obligation and can therefore be traded on the secondary market. BAs are commonly used in international trade, where parties to a transaction are unwilling to offer credit terms.
Banker's hours are the hours of the week that a bank branch is open for business. The term is a remnant from the days when bank branches commonly closed early during the work week and weren't open on weekends.
The banker's year has 360 days, rather than 365. The 360-day year simplifies monthly interest calculations by allowing for 12 equal periods of 30 days each.
Banking is the practice of accepting deposits for safekeeping, making payments as requested by depositors and, in many cases, loaning deposited funds for profit.
Bankrupt is the state of being financially insolvent. In the legal sense, an individual or business must be declared bankrupt by a court proceeding.
Bankruptcy Code is another name for United States Code Title 11-Bankruptcy, the federal legislation governing bankruptcy proceedings.
A bankruptcy trustee is the person who's assigned to represent creditors' interests in a Chapter 7 or Chapter 13 bankruptcy proceeding. The trustee's responsibilities include reviewing the debtor's assets, and reviewing claims of exemptions, among other things. Trustees are appointed and managed by the United States Trustee, but are not government employees.
The bargain element is the implied gain that an investor earns when exercising a stock option, i.e., the difference between the fair market value of a stock on the day the option is exercised, and the strike price, multiplied by the number of shares. For tax purposes, the bargain element is treated as income and not as a capital gain.
Base interest rate
The base interest rate is the lowest rate an investor will tolerate for a non-Treasury security. Because Treasury securities are considered no-risk investments, the base interest rate would be greater than the rate offered by Treasury securities of the same maturity.
The base price is the sales value of a vehicle that has no options. Base price includes the car's standard equipment and warranty, but doesn't include the cost of any upgrades, or optional dealer services. Auto dealerships list a vehicle's base price on the window sticker.
The base rate is the percentage of fees banks charge their most qualified borrowers. The term is typically used in the U.K., and is similar in definition to the prime rate in the U.S.
Basis is the purchase price of an investment, minus commissions and purchases expenses. The basis is an important component in the calculation of capital gains or losses for tax purposes. In reference to IRAs, the basis is the balance within an IRA representing nondeductible contributions. Basis can also mean the difference between a commodity's cash price and its shortest duration futures price.
A basis point is 1/100th of 1 percent. The basis point is often used in reference to interest rates. If the Fed decreases the prime rate from 7.50 percent to 7.25 percent, the rate is said to have gone down 25 basis points.
A bearer bond is a debt investment that doesn't have a registered owner, but is considered the property of whoever has it in his or her possession. The bond may have attached coupons that must be submitted to the bond issuer in return for interest payments.
A bearing wall supports the weight of a structure. In a one-story home, for example, the bearing walls primarily support the roof. Bearing walls can't be removed without affecting the structure's stability.
Before-tax income is the gross earnings of an individual or company prior to the deduction of taxes.
A beneficiary is any individual or legal entity that's named as an inheritor of funds or property in a bank account, trust fund, insurance policy, will, or similar financial contract.
Benefit offset is a withholding of a percentage of retirement plan benefits. If a retirement plan member owes money to the plan and is receiving benefit payments from another source, the U.S. Social Security Act allows for a benefit offset of up to 10 percent of that member's benefits.
Benjamin Graham (1894-1976) was an economist, investor, author, and adjunct professor. Considered one of the first experts in security analysis, Graham published The Intelligent Investor in 1949. Notably, Warren Buffet was one of Graham's students at Columbia University.
Bequest is the act of giving property to a beneficiary in a will. The term can also refer to the bequeathed property.
Best efforts mortgage lock
A best efforts mortgage lock allows a mortgage originator to obtain a preliminary commitment on selling a mortgage loan into the secondary market for the purposes of pricing the mortgage for the applicant. While the mortgage originator must make his best effort to close the loan and deliver it to the buyer, the originator is not contractually bound to deliver the loan to the buyer.
Betterment, in reference to real estate, is an addition, improvement, or modernization that adds value to the property.
Biennial ownership refers to a type of timeshare ownership in which the owner may use the timeshare unit every other year.
A bilateral contract is a legal document that binds both parties to perform a specific action. A property purchase contract, for example, binds the seller to transfer property to the buyer, and the buyer to provide funds to the seller.
Bill presentment is an Internet-based system that facilitates the creation, management, and payment of bills online. The service is primarily used by commercial entities in a wide variety of industries.
Billing cycle refers to the length of time that passes between statement dates. For credit cards, the billing cycle is commonly one month.
Billing statement is periodic account summary sent by a company to customers who've had account transactions during the billing period. Credit card companies issue monthly billing statements, which itemize the transactions within the billing period as well as the finance charges, minimum payment due, and payment due date.
A bi-monthly mortgage allows the borrower to make half of the scheduled payment twice each month, for a total of 24 annual payments. If the monthly payment is $2,000, for example, the borrower would make two payments of $1,000 during the month, rather than one payment of $2,000. This reduces total interest costs associated with the mortgage because the principal balance will be reduced every two weeks instead of just once monthly.
A bi-weekly mortgage is structured so that the borrower makes half the scheduled monthly payment every two weeks, for 26 annual payments. The bi-weekly structure reduces total interest costs because each year, the borrower is making the equivalent of 13 monthly payments rather than 12.
Blanket insurance provides several types of coverages under one policy. For example, a blanket policy might cover more than one property type at one location, or two separate properties at two separate locations. There are homeowner's blanket policies that cover the dwelling as well as the insured's personal property.
A blanket lien provides the creditor with rights to almost all of a debtor's assets. This is different from a conventional lien, which only provides the creditor with rights to a specific asset.
A blanket recommendation is buy or sell advice given by a brokerage to its customers. This recommendation may pertain to a particular security, security type or industry, and does not consider a individual investor's objectives or current holdings. A blanket recommendation is the equivalent of saying something like, "Acme Company stock is undervalued right now, so it's a good time to buy."
A blended rate is the weighted average interest rate of a loan that charges one rate for part of the debt, and another rate for another part of the debt. In the case of a cash-out mortgage refinancing, some lenders might offer to extend one rate on the portion of the debt that's already outstanding, and a separate rate on the cash-out part of the loan. The weighted average of the two rates would be the loan's blended rate. Blended rate can also refer to the weighted average rate of a homeowner's first and second mortgages.
A blind trust is a legal arrangement for holding and/or managing money or other assets for one or more beneficiaries, where the beneficiaries aren't privy to any information about the assets within the trust.
The Blue Book, also called Kelley Blue Book, is a printed valuation guide that assists vehicle owners, auto dealers, and insurance companies in determining the market value or sales price of a vehicle.
Blue collar describes an individual or class of individuals who are employed in manual labor trades and earn hourly wages.
Blue sky laws
Blue sky laws are securities regulations passed by individual states. These regulations impose certain registration and filing requirements on issuers of securities in an effort to protect investors from securities fraud.
Blue-ribbon condition describes a home or other asset that's in excellent form, with no signs of wear.
Board Certified In Estate Planning - BCE
Board Certified In Estate Planning, or BCE, describes an individual who has satisfactorily completed an industry-recognized course in estate planning. The Institute of Business & Finance (IBF) provides this course for financial planners and financial advisors.
A board foot is a cubic measurement typically used for lumber. One board foot is the equivalent of an item that is 1 foot long by 1 foot wide by 1 foot thick.
Boilerplate describes standardized language that's used within a legal document. Any individual or company that frequently engages in contracts or agreements is likely to use boilerplates to avoid the expense of having each new contract reviewed and approved by legal counsel.
Bona fide is Latin for "in good faith." It's used as a synonym for genuine, original, or without fraud.
A bond is a loan that's sold in shares as a security. Corporations and government entities sell bond shares to raise money for special projects, expansion, or simply to cover budgeted expenses. One who purchases a bond is called the bondholder. The terms of the bond specify when and how the bond issuer will repay the principal to the bondholder.
Bond Buyer's 20-bond index
Bond Buyer's 20-Bond Index is a representation of municipal bond trends based on a portfolio of 20 general obligation bonds that mature in 20 years, with an average AA rating. The index is based on a survey of municipal bond traders rather than actual prices or yields. The 20-Bond Index is published by The Bond Buyer, a daily financial publication.
A book is a listing of long and short positions held by a trader of securities.
Book value is the cost of an item or capital asset plus the cost of additions, less depreciation. In the case of financial records, book value is the net amount attributed to an asset on a balance sheet. The term can also refer to the net worth of a company's common stock equity.
Boomerang refers to an adult of the baby boomer generation who lives with his or her parents after a period of living independently. The term is slang, primarily used in America.
Boot is anything of value that has been included in a trade to even up the transaction. A vehicle trade-in is the most common example: The trade isn't even unless you turn in the used vehicle plus cash (the boot) to pay for the new vehicle.
A borough is a town that's incorporated, or an administrative unit designating a community or area. New York City has five boroughs: The Bronx, Brooklyn, Manhattan, Queens, and Staten Island.
To borrow is to obtain money or property with the intention of returning it at some later date. In terms of finance, to borrow is to draw against a loan, which usually must be repaid with interest.
A borrow pit is a ditch or hole where soil has been dug out for use in another location. The term is used in the context of construction projects.
A borrower is an individual or entity that receives loaned funds or property and is required to return those funds or property at some future date. In the financial sense, a borrower is one who draws money from a credit facility, and is contractually obligated to pay back the principal plus interest.
Bot is a shortened form of robot. The term refers to a computer program that can execute commands autonomously. Bots can be used to record and collect private information from another's computer.
A botnet, short for robot network, is a group of computers that are being exploited to distribute spam and/or viruses. These computers have been infected with a trojan that receives commands from the third-party which controls the botnet.
Bounce protection is an expensive form of overdraft protection offered to a bank's checking accountholders. The service is similar to an overdraft line of credit, except that the bank reserves the right to refuse overdraft coverage at any time without prior notice.
A bounced check is a check that the bank has returned unpaid because there aren't sufficient funds in the associated account to cover the amount of the check.
A boundary is a border or a limit. In real estate, a boundary is the meeting point of two properties, where one property ends, and the next begins.
Breach of contract
A breach of contract is a failure of one party to perform as required by a legal agreement. A breach of contract generally gives the non-violating party the right to pursue legal recourse. Breach of contract is also called default.
Breach of covenant
Breach of covenant is the failure to perform a promise made, usually within a contract.
Breach of warranty
A breach of warranty is a violation of a sales agreement that pertains to the condition or title of the item or property being sold. In real estate, a breach of warranty occurs when the seller is unable to transfer clear title of property to the buyer.
Break the buck
Break the buck, pertaining to money market mutual funds, is when the fund's share price drops below $1. If a fund breaks the buck, the investors stand to lose principal.
Break-even point is the moment in time when the outlay of expenses has been recovered through sales. In business, the term is used in evaluating capital projects; decision-makers want to know long it will take to recoup expenses if a project is implemented. In options or securities transactions, the break-even point is the price at which the cost is equal to the net proceeds.
Breakup value is an estimate of what a company's total market capitalization would be if its divisions were separately operated, separately traded companies.
Bridge financing is short-term debt that's collateralized by one asset to fund the purchase of another asset. When the collateral is sold, the debt must be repaid. Bridge financing is used in real estate transactions where a homeowner is purchasing a new home before the old home is sold.
A broker loan is debt extended to an individual or company (the broker) that trades securities on another's behalf. Brokers might use the funds to fund customer margin accounts (where a customer makes an investment purchase on credit) or to fund the broker's own investment purchases.
Broker loan rate
Broker loan rate is the rate of interest, or finance charges, expressed as a percentage of the total debt, that a broker must pay when borrowing money to fund customers' margin accounts.
Broker Price Opinion - BPO
Broker price opinion, or BPO, is the market value of a real estate property, as estimated by a real estate professional. A BPO is not an appraisal; it's an educated determination of value based on sales trends, condition of the property, and recent sales prices of similar properties.
Brokerage (brokered) CD
A brokerage, or brokered, CD is a time deposit sold to individual investors by a brokerage firm, and can be traded on the secondary market. An investor might sell the CD prior to maturity without an interest penalty, but the sales price will depend on the time remaining until maturity, as well as other factors.
A brokerage account is a deposit of securities assets held with a brokerage firm. The brokerage firm is an entity that buys and sells securities, for a fee, on behalf of its customers.
A brokerage, or brokered, CD is a time deposit sold to individual investors by a brokerage firm, and can be traded on the secondary market. An investor might sell the CD prior to maturity without an interest penalty, but the sales price will depend on the time remaining until maturity, as well as other factors.
Broom clean refers to the desired state of a property that's to be transitioned to a new tenant or buyer. Trash should be picked up and the floors should be swept.
A buffer strip is an area of natural vegetation lying alongside a stream or roadway that helps minimize runoff and erosion.
Building and loan association
A building and loan association is a cooperative that assists its members in obtaining financing for real estate purchases and construction.
A building inspector is an employee of the local government's building department who monitors a building's construction to ensure that it meets local regulations. The building inspector might also inspect existing structures for ongoing code compliance.
A building moratorium is a postponement or termination of construction activity.
A building permit is a certificate issued by a local government office authorizing a construction project at a specific location.
Building restrictions are rules governing the physical characteristics of structures on a property.
Bulk sales escrow
A bulk sales escrow is an arrangement that forces a company to run the sale of specified assets through an agent. Those assets might be inventory, or other business assets. The bulk sales escrow protects the interests of unsecured credits by ensuring that asset sales proceeds aren't spent improperly.
A bullet is a large principal repayment, typically due at loan maturity. Bullets, which might be 98 percent or more of the loan balance, can be structured into long-term commercial loans that support significant business expansion.
A bullet CD is a time deposit that can't be called, or paid off, by the issuer prior to the maturity date.
A bullet loan is a debt facility that has minimal amortization until maturity, at which point a large, lump-sum repayment is due. Bullet loans are typically long-term loans used to fund business expansion.
A bump-up CD is a time deposit that allows the CD holder to elect to increase the interest rate once during the CD term. Such an increase, however, would only be available if market interest rates move up. Traditional CDs carry fixed interest rates.
A bungalow is a home style characterized by a simplistic, one-story design. The bungalow was popular with the North American working class in the early 20th century.
Burden of proof
Burden of proof refers to the responsibility, in a lawsuit, to present sufficient evidence for or against disputed facts. In civil cases, the plaintiff has the burden of proof, meaning that it's the plaintiff's responsibility to prove his or her case.
Burnout is a slowdown of mortgage prepayment activity on mortgages that are packaged into a mortgage-backed security (MBS). Mortgagors often prepay the mortgage debt, through refinancing, when interest rates go down. Such prepayment activity is bad for MBS investors, because it reduces future income potential. When an MBS has burnout, a percentage of the underlying mortgages were not prepaid when rates went down. Investors interpret this to mean that these mortgagors are less likely to refinance if rates drop again.
A business bankruptcy is the legal declaration that a business or commercial entity is unable to repay its debts.
Business credit is any form of debt instrument extended to a commercial entity.
Business finance companies
Business finance companies are lenders that specialize in providing credit to commercial entities.
Business interest expense
Business interest expense is the total of interest charges incurred by a commercial entity within a financial reporting period.
A bust-up takeover is a corporate buyout financed primarily by debt, where the purchaser sells part of the assets of the acquired company to repay the debt.
Buydown is an upfront cash payment made to temporarily reduce a mortgage interest rate and monthly payment. A seller might fund a buydown as a means of enhancing the deal for the buyer, or to help a buyer qualify for mortgage financing.
A buydown mortgage is debt secured by real estate property that's structured with a cash payment upfront to reduce the monthly payment amount for a specified time period.
Bylaws are the rules adopted by a corporation that define the roles and responsibilities of shareholders, directors, and officers.