Balance Sheet
A financial statement that shows assets, liabilities, and net worth as of a specific date.

Balloon Mortgage
A mortgage with periodic installments of principal and interest that do not fully amortize the loan. The balance of the mortgage is due in a lump sum at a specified date in the future, (usually at the end of the term).

Balloon Payment
A scheduled payment on a mortgage that is larger than other periodic payments, usually the unamortized final payment.

Bankruptcy
A federal court proceeding in which a debtor who owes more than his or her assets can relieve the debts by transferring the assets to a trustee. Chapter 7- Officially called Liquidation; Chapter 7 is the most common type of bankruptcy proceeding. Liquidation involves the appointment of a trustee who collects and sells the non-exempt property of the debtor and distributes the proceeds to the creditors. Also referred to as "no-asset cases." Chapter 11- Officially called Reorganization, Chapter 11 is ordinarily used by businesses that desire to continue operating and repay creditors conconcurrently through a court-approved plan of reorganization. Chapter 13- Officially callled Adjustment of Debts of an Individual with Regular Income; Chapter 13 is designed for an individual debtor who has a regular source of income. Chapter 13 is often preferable to Chapter 7 because it enables the debtor to keep a valuable asset, such as a house or land. It allows the debtor to adhere to a plan to repay creditors over time, usually three to five years.

Basis Point
A unit of measure: 1/100th of one percent. For example, the difference between a 9.0% loan and a 9.5% loan is 50 basis points.

Bill of Sale
A written document that serves as evidence of the transfer of title to personal property.

Binder
An agreement to consider the purchase of real estate. The agreement is secured and backed by a cash deposit as evidence of good faith on the part of the purchaser.

Biweekly Mortgage
A loan on which payments are due and payable every two weeks instead of standard monthly payment schedule. Twenty-six biweekly payments are the equivalent of 13 monthly payments.

Blanket Mortgage
A mortgage that covers more than one parcel of real estate owned by the same buyer.

Bridge Loan
A second mortgage that is collateralized by other property owned by the applicant and currently offered for sale. The agreement allows the proceeds to be used for closing on the new purchase before the property sold.

Broker
A person or firm who acts on behalf of another.