Balloon (Payment) Mortgage
Usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a specific time.

Bank Draft
A payment method where your loan payment is automatically deducted from your checking or savings account, so you don't have to mail in your payment each month.

Bankruptcy
A proceeding in a federal court in which a borrower who owes more than his or her assets can relieve the debts by transferring his or her assets to a trustee. Different chapters or types of bankruptcy exist. If a person files bankruptcy, a record of the filing appears on the borrower's credit report for up to 10 years.

Base Price
The cost of a car without options, but including standard equipment, factory warranty, and freight. This price is printed on the Monroney sticker. It's a good idea to know the base price of a car so you know what it would cost without all the bells and whistles.

Beneficiary
A person, persons, or organization designated to receive the benefits from a life insurance policy, trust, estate, or pension upon the death of the insured, testator, or pensioner.

Bill of Sale
A document detailing the conditions of a sale used to transfer the title to certain goods from seller to buyer. The seller is responsible for preparing the bill of sale.

Billing Error
Any mistake in your monthly statement as defined by the Fair Credit Billing Act.

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.

Black Book
A reference book typically used by dealerships to look up the wholesale value of an auto. Similar to the Kelley Blue Book, which is generally used more by consumers.

Blue Boo
Officially named The Kelley Blue Book, this reference is typically used by consumers to look up the fair market price of the wholesale, retail, and loan values of autos.
Borrower One who receives funds in the form of a loan with the obligation of repaying the loan in full with interest

Bridge Loan
A bridge loan is a short-term loan that covers the time between your closing date of a home you are buying and the closing date of the home you are selling. You usually need a contract to sell your current house.

Broker
An individual in the business of assisting in arranging funding or negotiating contracts for a client but who does not loan the money himself.

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 set by a filed plat of subdivision, by restrictive covenants in deeds or leases, by building codes, or by zoning ordinances.

Business Days
Always contact your institution to find out what days it counts as business days under the Truth in Lending and Electronic Fund Transfer Acts.

Buydown
When the lender and/or the home builder subsidizes the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires.

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