Back fill
Soil used to solidify the foundation of a structure.

Back title letter
A letter that a title insurance company gives to an attorney who then examines the title for insurance purposes.

Back-end ratio
A lender calculation that compares a borrower's total debt (principal, interest, property taxes, and insurance, plus other monthly debt payments) to gross monthly income.

Back-to-back escrow
Arrangements that an owner makes to oversee the sale of one property and the purchase of another at the same time.

Backerboard
A rigid board used beneath tile.

Backfill
Soil used to solidify the foundation of a structure.

Backup offer
A secondary bid for a property that the seller will accept if the first offer fails.

Backwater valve
A valve in a sewer line that prevents sewage from flowing back into a house.

Baffle
A device used as a heat shield to deflect the byproducts of combustion.

Balance sheet
A statement that shows the assets, liabilities and net worth of an individual.

Ball cock
One type of inlet valve assembly inside a toilet tank that, when opened automatically, fills the tank with water.

Balloon loan
A mortgage in which monthly installments are not large enough to repay the loan by the end of the term. As a result, the final payment due is the lump sum of the remaining principal.

Balloon Mortgage
A mortgage loan that requires the remaining principal balance be paid at a specific point in time. For example, a loan may be amortized as if it would be paid over a thirty year period, but requires that at the end of the tenth year the entire remaining balance must be paid.

Balloon Payment
The final lump sum payment that is due at the termination of a balloon mortgage.

Balloon-frame construction
A type of framing used in two-story homes in which studs extend from the ground to the ceiling of the second floor.

Baluster
Intermediate vertical support for a stair railing, often made from turned hardwood.

Balustrade
Railing held up by a set of posts on a porch or stairway.

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
By filing in federal bankruptcy court, an individual or individuals can restructure or relieve themselves of debts and liabilities. Bankruptcies are of various types, but the most common for an individual seem to be a "Chapter 7 No Asset" bankruptcy, which relieves the borrower of most types of debts. A borrower cannot usually qualify for an "A" paper loan for a period of two years after the bankruptcy has been discharged and requires the re-establishment of an ability to repay debt.

Bargain sale
The sale of a piece of property for less than market value.

Base loan amount
The amount upon which loan payments are based. If the borrower finances his or her closing costs, those costs will be added to the base loan amount.

Baseboard
Any board or molding found at the bottom of an interior wall.

Baseboard electric heat
Heating units installed in the floor that can be controlled by a central thermostat.

Basement
The area of a home below ground level.

Basis Point
A basis point is one one-hundredth of one percentage point.

Batten
A narrow piece of material used on the outside of a house to cover joints in walls.

Bay
The opening between two columns or walls that forms a space.

Bay window
A window that projects outward in a curve.

Bearer
The legal owner of a piece of property.

Bearing wall
A wall that supports its own weight in addition to other parts of a structure.

Before-tax income
Total income before taxes are deducted.

Bequest
Personal property given to a person through a will.

Berm
A built-up lip of concrete designed to prevent runoff water from entering the garage or driveway.

Best Faith Estimate
An estimate of the total costs for securing a real estate loan, that is given to borrowers prior to closing.

Betterment
An improvement that increases a property's value as opposed to repairs that maintain the value.

Bi-level
A home that has two levels. Typically, a garage or storage area is situated in the lower level and the home in the upper section. Most bi-level structures were built after 1950.

Bi-Weekly Mortgage
A mortgage in which you make payments every two weeks instead of once a month. The basic result is that instead of making twelve monthly payments during the year, you make thirteen. The extra payment reduces the principal, substantially reducing the time it takes to pay off a thirty year mortgage. Note: there are independent companies that encourage you to set up bi-weekly payment schedules with them on your thirty year mortgage. They charge a set-up fee and a transfer fee for every payment. Your funds are deposited into a trust account from which your monthly payment is then made, and the excess funds then remain in the trust account until enough has accrued to make the additional payment which will then be paid to reduce your principle. You could save money by doing the same thing yourself, plus you have to have faith that once you transfer money to them that they will actually transfer your funds to your lender.

Bid out
The process that contractors use to estimate the cost of a house or project before it is completed.

Bidding war
Offers from multiple buyers for a piece of property. Agents also sometimes compete to list a house for sale.

Bilateral contract
A contract in which the parties involved give mutual promises. Also called "reciprocal" contracts.

Bill of Sale
A written document that transfers title to personal property. For example, when selling an automobile to acquire funds, which will be used as a source of down payment or for closing costs, the lender will usually require the bill of sale (in addition to other items) to help document this source of funds.

Binder
A report issued by a title insurance company that details the condition of a home's title and provides guidelines for a title insurance policy.

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.

Biweekly mortgage
A mortgage that requires payments every two weeks and helps repay the loan over a shorter term.

Blanket insurance policy
A policy that covers more than one person or piece of property.

Blanket mortgage
A mortgage that covers more than one property owned by the same borrower.

Blighted area
A neighborhood that has deteriorated.

Blind nailing
Nails driven into a wall and concealed with putty.

Blue sky laws
Regulations on the sale of securities to prevent consumers from investing in fraudulent or high-risk companies without being informed of the risks.

Blue-ribbon condition
A house maintained close to its original condition. Also called mint condition.

Blue-sky laws
Regulations on the sale of securities to prevent consumers from investing in fraudulent or high-risk companies without being informed of the risks.

Blueprint
The plan for a home or other structure.

Board and batten
A type of siding composed of vertical boards and batten slats that cover wall joints.

Board foot
Measurement of lumber that is the equivalent of 144 cubic inches.

Board of Equalization
A state board charged with ensuring that local property taxes are assessed in a uniform manner.

Board-and-batten siding
Siding is composed of 8- to 12-inch wide wooden boards nailed vertically to create a barn-like exterior.

Boilerplate
Form language used in deeds, mortgages, and other documents. Details can be added by individual parties.

Bona Fide
In good faith.

Bond
An agreement that insures one party against loss by acts or defaults of another party.

Bond Market
Usually refers to the daily buying and selling of thirty year treasury bonds. Lenders follow this market intensely because as the yields of bonds go up and down, fixed rate mortgages do approximately the same thing. The same factors that affect the Treasury Bond market also affect mortgage rates at the same time. That is why rates change daily, and in a volatile market can and do change during the day as well.

Bonus room
A room with no specifically designated function, unlike a living room, bedroom, or kitchen.

Book value
The value of a property as a capital asset based on its cost plus any additions, minus depreciation.

Boot
A piece of sheet metal that connects a heating or cooling duct and a vent.

Boring test
An analysis of soil in which holes are bored into the ground and samples are removed.

Borough
A section of a city that has authority over local matters.

Borrow
Sand, gravel, or other material used for grading.

Borrow pit
The hole at a site that has been excavated.

Boundary
The dividing line between two adjacent properties.

Braced framing
A construction method in two-story homes in which the frame is reinforced with posts and braces.

Bracing
The technique used to reinforce a structure.

Branch circuit
An electrical circuit with its own circuit breaker in the service panel.

Breach of contract
The failure to perform provisions of a contract without a legal excuse.

Breach of warranty
A seller's inability to pass clear title to a buyer.

Break-even point
The point in which the owner's rental income matches expenses and debt.

Breezeway
A roofed passageway with open sides.

Brick
Building material made from clay molded into oblong blocks and fired in a kiln.

Brick veneer
A brick facade on a wall or fireplace.

Bridge Loan
Not used much anymore, bridge loans are obtained by those who have not yet sold their previous property, but must close on a purchase property. The bridge loan becomes the source of their funds for the down payment. One reason for their fall from favor is that there are more and more second mortgage lenders now that will lend at a high loan to value. In addition, sellers often prefer to accept offers from buyers who have already sold their property.

Broker
Broker has several meanings in different situations. Most Realtors are "agents" who work under a "broker." Some agents are brokers as well, either working for themselves or under another broker. In the mortgage industry, a broker usually refers to a company or individual that does not lend the money for the loans themselves, but broker loans to larger lenders or investors. (See the Home Loan Library that discusses the different types of lenders). As a normal definition, a broker is anyone who acts as an agent, bringing two parties together for any type of transaction and earns a fee for doing so.

Brokerage
The act of bringing together two or more parties in exchange for a fee or commission.

Broom clean
The ideal condition of a building when it is turned over to an owner or tenant.

Brownstone
A vintage row house constructed of red sandstone.

Buffer strip
A parcel of land that separates two or more properties.

Builder upgrades
Extra features or better finishing materials offered by a builder.

Building and loan association
An organization that raises money to helps its members purchase real estate or construct a building.

Building code
A comprehensive set of laws that controls the construction or remodeling of a home or other structure.

Building inspector
A city or county employee who enforces the building code and ensures that work is correctly performed.

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.

Building moratorium
A halt on home construction to slow the rate of development.

Building paper
A thick, water-resistant paper that serves as insulation.

Building permit
A permit issued by a local government agency that allows the construction of home or renovation of a house.

Building restrictions
Regulations that limit the manner in which property can be used.

Built-ins
Appliances or other items that are framed into a home or permanently attached.

Bulkhead
A retaining wall designed to hold back water from the ocean or other body of water.

Bundle of rights
The various interests or rights an owner has in a property.

Bungalow
A small one-story house or cottage.

Butt
The way in which two boards meet so that the ends touch in a continuous line.

Butterfly roof
A roof formed by two gables that dip in the middle to resemble a butterfly's wings.

Buy-down mortgage
A home loan in which the lender receives a premium as an inducement to reduce the interest rate during the early years of the mortgage.

Buydown
Usually refers to a fixed rate mortgage where the interest rate is "bought down" for a temporary period, usually one to three years. After that time and for the remainder of the term, the borrower’s payment is calculated at the note rate. In order to buy down the initial rate for the temporary payment, a lump sum is paid and held in an account used to supplement the borrower’s monthly payment. These funds usually come from the seller (or some other source) as a financial incentive to induce someone to buy their property. A "lender funded buydown" is when the lender pays the initial lump sum. They can accomplish this because the note rate on the loan (after the buydown adjustments) will be higher than the current market rate. One reason for doing this is because the borrower may get to "qualify" at the start rate and can qualify for a higher loan amount. Another reason is that a borrower may expect his earnings to go up substantially in the near future, but wants a lower payment right now.

Buydown mortgage
A home loan in which the lender receives a premium as an inducement to reduce the interest rate during the early years of the mortgage.

Buyer agent
An agent representing a buyer in a home purchase, either as a single agent or as an exclusive buyer's broker.

Buyer broker
A real estate broker who exclusively represents the buyer's interests in a transaction and whose commission is paid by the buyer rather than the seller.

Buyer Home Finding Network
National referral service for buyer's brokers only. Call (800) 500-3569 for information and referrals.

Buyer market
A slow real estate market in which buyers have the advantage.

Buyer remorse
An emotion felt by first-time homebuyers after signing a sales contract or closing the purchase of a house.

Buyers Resource Real Estate
National buyer's brokerage company with offices in 13 states. Call (800) 359-4092 for information and referrals.

Bylaws
The rules and regulations that a homeowners association or corporation adopts to govern activities.