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Houston Mortgage > Glossary >
Home Equity > B 1-10
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Back title letter
A document that a title insurance company gives to an attorney specifying condition of the title.
Back-end ratio or back ratio
The sum of the house payment and all other monthly debt -- credit cards, car payments, student loans and the like -- divided by before-tax income. Traditionally, lenders were loath to extend borrowers' back-end ratios past 36 percent, but they often do now.
Balloon loan
A loan in which the payments aren't set up to repay the loan in full by the end of the term. At the end comes the balloon payment -- one that is larger than the other, periodic payments and pays off the remaining principal.
Balloon mortgage
A loan that has regular monthly payments which amortize over a stated term but call for a final lump sum (balloon payment) at the end of a specified term, or maturity date, such as 10 years.
Balloon payment
A loan installment that is larger than the other, periodic payments and pays off the remaining principal.
Bank
An institution that acts as a financial intermediary by receiving money from depositors and lenders and also lending to borrowers. A bank must be chartered and meet certain criteria. Chartering is done by the Comptroller of the Currency for national banks, by the Federal Reserve System for state member banks, by the Federal Deposit Insurance Corporation (FDIC) for insured banks, and by state regulatory agencies. Also referred to as a commercial bank.
Bank holding company
A company that owns or controls one or more banks or companies associated with banking such as leasing companies, credit companies, etc. It is usually identified by the word Bancorp or Bancshares in the name. The Federal Reserve Board of Governors regulates all bank holding companies.
Banker's year
A 360-day year, used so the year can be divided into 12 equal months of 30 days each. This makes interest calculations simpler and more consistent.
Bankruptcy
A legal proceeding that protects a debtor from legal action by some creditors. There are two basic ways of filing for personal bankruptcy. A Chapter 7 bankruptcy declaration gets rid of all debts (except some taxes and maybe alimony payments); Chapter 13 allows a borrower with a steady income to pay off bills over a 36- to 60-month period.
Bankruptcy code
The informal name for Title 11 of the United States Code (11 U.S.C. 101 - 1330), the federal bankruptcy law.
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Houston Home Mortgage