Back-to-Back Settlement

Transactions involving selling one home and purchasing another on the same day, usually within hours of one another. The seller typically moves from one settlement table to the next in order to accomplish the purchase transaction.

Balloon

A mortgage that does not fully amortize over the term of the mortgage. The principal remaining at the end of the term is called a balloon payment.

Base Mortgage Amount

The mortgage amount before mortgage insurance or VA funding fee is added.

Bi-weekly Mortgage

Bi-weekly Mortgage. A mortgage that requires one-half of one monthly payment every two weeks. The resulting extra monthly payment each year lowers the mortgage term to approximately 22-25 years.

Binder or "Offer to Purchase"

A preliminary agreement, secured by the payment of earnest money, between a buyer and seller as an offer to purchase real estate. A binder secures the right to purchase real estate upon agreed terms for a limited period of time. If the buyer changes his mind or is unable to purchase, the earnest money is forfeited unless the binder expressly provides that it is to be refunded.

Borrower

An individual (also known as mortgagor) who receives funds in the form of a loan with an obligation to repay the principal with interest.

Bridge Loan

Bridge Loan. Short-term mortgage, usually interest only, utilized to help a purchaser settle on a home before his/her present home is sold.

Broker

(See real estate broker)

Building Line or Setback

Distances from the ends and/or sides of the lot beyond which construction may not extend. The building line may be established by a filed plat of subdivision, by restrictive covenants in deeds or leases, by building codes, or by zoning ordinances.

Buydown

Buydown. To lower the interest rate on a mortgage. A permanent buydown would lower the rate for the entire term of the mortgage. A temporary buydown would lower the rate for a certain portion of the mortgage term, usually the first few years.