Mortgage Glossary

Balloon Mortgage:

A mortgage that typically offers low rates for an initial period of time (usually 3, 5, 7, or 10) years.  After that time period elapses, the balance is due or is refinanced by the borrower.

Bankruptcy:

A federal law whereby a person’s assets are turned over to a trustee and used to pay off outstanding debts.  This usually occurs when someone owes more than they have the ability to repay.

Borrower:

A person who has been approved to receive a loan and is then obligated to repay it and any additional fees according to the loan terms.

Building Code:

Based on agreed upon safety standards within a specific area, a building code is a regulation that determines the design, construction, and materials used in building.

Budget:

A detailed record of all income earned and spent during a specific period of time.