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Glossary of
FinanciaI & Real Estate Terms

Index of Terms | Complete List of Terms

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Backup Offer : There is always a provision of an alternate bid or second offer on a property if the first offer does not work out. However, this second offer has to be accepted.

Bad Debt Recovery : A term used to describe a poor credit rating. Common practices that can damage a credit rating include making late payments, skipping payments, exceeding card limits or declaring bankruptcy. "Bad Credit" can result in being denied credit.

Bad Credit : Money that is collected on a bad debt account.

Bad Debt Reserve : An amount that is set aside by a company as reserve for bad debts.

Bad Debt Write-Off : Customer's account that is written off  and removed from the books.

Balance : The amount of the loan which is unpaid. It is equal to the loan amount minus the sum of all prior payments to the principal.

Balance Transfer : Moving a balance (debt) from one credit card to another. This is often done with special checks or forms, or may be offered as an option on some credit card applications. The usual reason is to shift an ongoing debt to an account with a lower interest rate.

Base Loan Amount : The original loan amount on which loan payments are based. If additional charges accrue, those costs are added to the original loan amount.

Balloon Mortgage : A mortgage that acts like a fixed-rate mortgage for a set number of years (usually five or seven) and then must be paid off in full in a single "balloon" payment. These loans are popular with those expecting to sell or refinance their property within a definite period of time.

Balloon Payment : A lump sum payment on a purchase or conditional sale or lease agreement that may be charged at the end of a loan or lease.

Bank Draft : This is a mode of payment where your loan is automatically deducted from your checking or savings account. In such cases you don't have to mail in your payment each month.

Bankruptcy : When a person is unable to meet his financial obligations he is declared bankrupt by a decree of the court. The Federal Bankruptcy Law states that this person's property is then used to satisfy the creditors. He can relieve the debts by transferring his assets to a trustee to clear his debts. Different chapters or types of bankruptcy exist amongst which Chapter 7 and Chapter 13 are the most popular ones. If a person files bankruptcy, a record of the filing appears on the borrower's credit report for up to 10 years.

Beacon Score : This is your credit score that creditors look at when determining if you are credit worthy. Your Beacon Score is determined by negative entries such as late payments which would decrease your score or a positive, timely payment history on your accounts which would increase your score.

Bequest : A personal property which has been gifted to an individual and this arrangement is mentioned in the will.

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

Bill of Sale : A written document that transfers a title to personal property.

Billing Cycle : The number of days between statement dates. This is generally about 25 days.

Billing Error : According to the FCBA or Fair Credit Billing Act any mistakes in your monthly statement is known as a billing error.

Biweekly Mortgage : A mortgage loan payment that requires a payment twice monthly, yielding thirteen payments per year instead of twelve. As a result, it significantly reduces the time a principal is paid off.

Bona Fide : Undertaken in good faith.

Bonded Labor : A means of paying off loans with direct labor instead of currency or goods. It is either a kind of indenture or truck system, and is a form of unfree labor.

Blanket Mortgage : A mortgage thar is secured by pledging more than one property or asset as collateral.

Bonded Debt : The portion of a corporation's or state's indebtedness that is represented by the bonds it has issued.

Book Value : Acquisition costs less any accrued depreciation.

Borrower : A person who takes money in the form of a loan and is committed to pay it back. This repayment in most cases has an additional interest amount added to the original amount of money borrowed.

Bridge Loan : A secured equity loan to solve a short-term financing problem.

Broker : An individual who assists in arranging for funds and also negotiates contracts for a client. However this individual does not borrow money for his individual purpose.

Budget : A personal financial record which has the figures of all the income and expenditure done within a specific time limit of all money spent and earned in a specific time frame.

Budget Mortgage : A mortgage that includes a portion for taxes and insurance as well as principal and interest.

Bureau of the Public Debt : An agency of the United States Department of the Treasury. This Treasury Bureau borrows money needed to operate the Federal Government, accounts for the resulting debt, and provides reimbursable services to other Federal agencies. Borrowing is done by selling US Treasury bills, notes, bonds and TIPS, as well as US Treasury savings bonds. The bureau pays interest to investors and redeems investors' securities.

Business Days : According to the Truth in Lending Act or Electronic Fund Transfer Act there are specific days allotted for business dealings. These days are known as business days.

Buydown : A lump sum payment made to the creditor by the borrower or by a third party to reduce the amount of some or all of the consumer's periodic payments to repay the indebtedness.

Buyer's Market : The market prices which are favorable for the consumers is known as a buyer's market. When due to the price factor sell is less and the buyers are much higher, sellers may be forced to make a considerable price deduction.


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Index of Terms | Complete List of Terms


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