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Mortgage Dictionary "B"
Balance Sheet
Also known as the Statement of Financial
Position or Statement of Assets and Liabilities. The
Balance Sheet is a listing of the assets, liabilities (debts), and
owners equity of a business enterprise at a specific point in time.
The assets must equal the liabilities plus the owners equity.
Balloon Payment
Any payment of principal over and above the regular payment.
Bank Act
The Canadian Bank Act regulates all Canadian banking
activity conducted through a federally chartered institution. This
includes banks, trust companies, loan companies, and insurance
companies.
Bank Rate
The rate at which the Bank of Canada charges loans to the chartered banks. This is the rate on which lending
institutions base their prime lending rate.
Basis Point
One one-hundredth of one percent. Used to describe the amount of change
in yield in money debt instruments, including
mortgages.
Beacon Score
The name given to the credit score published by
Equifax. See also Empirica Score.
Binder Insurance
A temporary agreement where one party agrees to
insure another party while awaiting receipt of, and final action on,
the application for insurance.
Blanket Mortgage
A single mortgage registered against two or more
individual parcels of real property.
Blended Payments
Regular equal mortgage payments combining, or
blending, interest and principal components in one constant
payment.
Blended Rate
The rate that results
from the blending of an existing mortgage and a new mortgage with
differing interest rates into one consolidated mortgage. The calculation to determine the final rate takes into account
both the interest rates and the amount of principal for each of the component loans.
Bona Fide
In good faith, with valuable consideration and with absence of
notice of any problems.
Bonus
- A sum paid by the borrower, or retained by the
lender, from the advance of mortgage money as part of the
consideration for the making of the loan.
- A sum paid by the borrower to the lender as
consideration for prepayment of all or part of the principle
outstanding.
Book Value
The capital amount at which an asset is shown on the
books of an account. Usually it is the original cost, less reserves
for depreciation.
Book Value of a Mortgage
The mortgage amount outstanding on a mortgage at
any given point in time. The book value is determined by deducting
the amount of principal repayment from the original principal amount.
Borrowing By-laws
A document providing proof that a corporation has
the power to borrow under its company charter.
Breach of Contract
Failure, without legal reason, to perform any
promise that forms the whole or part of the agreed terms contained
in the contract.
Bridge Financing
A loan provided to borrowers to provide financing for purchase, pending closing of the sale of their existing property.
Bridge Loan
A bridge loan is a short-term, high interest loan intended to offset financial hardship until a long-term loan is
secured.
Brokerage
The aspect of business concerned with bringing parties together
for the transaction of business and the execution of contracts.
Brokerage involves sales, exchanges and rentals.
Broker
One who acts as an intermediary between parties in a
transaction. A broker, for a fee or other consideration, arranges a
transaction (a sale) by a seller to the buyer.
Builders Loan
A loan designed for borrowers who need financing for
construction projects. These differ from normal loans as the funds
are received in stages (also known as draws) during the
building process to protect the lender from construction
abandonment.
Builders Risk Insurance
Fire and extended coverage insurance for a
building under construction. Coverage increases automatically as the
construction progresses and terminates at completion.
Building Code
A set of minimum regulations respecting the safety
of buildings with reference to public health, fire protection and
structural sufficiency.
Building Scheme
A group of restrictive covenants attached
to two or more lots. These covenants are set by a vendor or
landlord. They detail restrictions for use and are agreed to by the
purchasers or tenants as part of the purchase or lease.
Bundle of Rights
Legal rights with respect to real estate ownership which
include the right to use, sell, lease, enter, or to give away the
property, plus the right to refuse to take any of these actions.
Buy Down
A lump sum payment as consideration for the reduction
in the interest charged on a loan from that which would normally be
charged.
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