Jargon Buster
Back title letter
A letter that a title insurance company gives to an attorney
who then examines the title for insurance purposes.
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.
Bailiff
An official representative of the courts, who may call
round to repossess your possessions or house if you cannot
keep up on your mortgage repayments and fail to reach
an agreement with your lender to ammend your repayments.
Balance breakdown
This is a fee that can be charged by your lender for a
month-by-month breakdown of your account balance, over
and above the information contained in your Annual Statement.
Costs £15 - £30
Balance outstanding
The amount of loan owed at one time.
Balance sheet
Forms part of the annual report and is the statement of
a value for a company's assets and liabilities and the
end of the financial year (balance sheet date). It shows
a company's financing through external debt, profit generation
and the issuing of share capital.
Balloon mortgage
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 payment
The final lump sum payment due at the end of a balloon
mortgage.
Bank of England base rate
The prevailing rate of interest set by the Bank of England
which all lenders generally follow.
Bankruptcy
A proceeding in which an insolvent debtor can obtain relief
from payment of certain obligations. Bankruptcies remain
on a credit record for seven years and can severely limit
a person's ability to borrow.
Bankruptcy charge
This is an investigation carried out by the Land Charges
Registry to check if a purchaser is or has ever been bankrupt.
Most mortgage lenders will insist on this search being
carried out and it usually carries a small charge.
Basic valuation
This is carried out for the purposes of mortgage and is
prepared for the lender. A survey will also help you to
find out independently whether the price is reasonable.
Your mortgage lender will almost certainly insist on a
basic valuation to make sure that the property is worth
the amount you are paying for it. They want to ensure
that you will be able to sell it again and therefore that
it is a safe investment. Although it is often referred
to as a survey, it doesn't go into nearly as much detail
as a homebyuyer or full survey would do.
Basis point
A basis point is one one-hundredth of one percentage point.
For example, the difference between a loan at 8.25 percent
and a mortgage at 8.37 percent is 12 basis points.
BBA - British Bankers Association
This is the trade organisation of the banks.
Before-tax income
Total income before taxes are deducted.
Benefit period
A time period over which the interest rate of a loan
is discounted, fixed or capped, for example.
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.
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.
Bonuses
Payments life assurance companies add to a 'with-profits'
endowment. Usually made annually, possibly with a final
(terminal) bonus when the endowment comes to the end of
its term. Bonuses aren't guaranteed and the amount awarded
can change each year.
Book value
The value of a property as a capital assetbased on
its cost plus any additions, minus depreciation.
Boundaries
These are the areas around a property which identify the
start and end of the land and ownership.
Breach of contract
The failure to perform provisions of a contract without
a legal excuse.
Breach of covenant
The failure to obey a legal agreement. Breach of warranty
A seller's inability to pass clear title to a buyer.
Bridging loan
This is a short term loan provided by a bank or building
society which covers you if you need to pay for your next
home, while still waiting for the money to come through
from the sale of your current home. If you do require
one of these, you must ensure that the funds to repay
the loan will be in place when the loan period expires.
Broker
Brokers and other intermediaries attempt to arrange suitable
financial products or policies for you. They can be fully
independent, part of a network that uses a panel of providers,
or tied to certain institutions in which case they can
only sell their products.
Brokerage
The act of bringing together two or more parties in exchange
for a fee or commission.
BSA - Building Societies Association
This is the trade organisation of the building societies.
Building society
Building societies are mutually owned organisations,
which exist not for profit but for the benefit of the
members. The idea of this is that the society is able
to offer cheaper products to its members, though this
is not always the case.
Building survey
Also known as a full survey, this is the fullest and most
comprehensive of the options open to the property buyer.
It involves an extensive investigation of the property
and a thorough examination of all the major aspects and
minor details that are visible. There is some flexibility
as you can request the surveyor to concentrate on specific
features of the property. It is most suitable for larger,
older homes with more potential for problems and those
more than 75 years old, property over three stories in
height, buildings of unusual construction (such as thatched,
timber etc.), or if you plan to extend, convert or renovate
the property. A full structural survey can cost you anything
from £400 to £1000.
Buildings and contents insurance
Buildings and contents insurance can often be purchased
together protecting both the building structure and your
belongings and possessions inside.
Buildings insurance
Buildings insurance is designed to give you financial
protection for the basic structure of your home, such
as the walls, roof and foundations. This usually includes
any external parts of the property such as your shed,
garage, conservatory or greenhouse.
Buy to let mortgage
A mortgage designed for people who buy a property with
the intention of letting it out. Largely similar to other
mortgages, but the maximum loan-to-value (LTV) is usually
lower, meaning that a larger deposit is required. Other
restrictions may also apply, such as minimum letting terms
and rental income. Lenders will normally incorporate a
proportion of the rental income when calculating how much
money they are willing to lend you.
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.
Bylaws
The rules and regulations that a homeowners association
or corporation adopts to govern activities.
