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Balloon |
The principal balance of a mortgage loan outstanding on maturity of the term. A balloon mortgage is one which does not fully amortize over its term to maturity. |
Bank Rate |
1 ) The rate at which the Bank of Canada charges on loans to the charted banks. 2) The rate at which the chartered banks lend demand money to their prime customers. 3) The minimum rate at which the Bank of Canada makes a short term advance to chartered banks, to savings banks governed by the Quebec Savings Bank Act and to investment dealers who are money market jobbers. Historically the bank rate has been administered directly by the Bank of Canada and was changed from time to time as a symbolic indicator of the bank's attitude toward monetary policy. However, recently (beginning March 13, 1 1980) the bank rate was set at 1/4 of 1 % above the weekly average tender rate of 91-day Treasury Bills. |
Basis Point |
One one-hundredth of one percent. Used to describe the amount of change in yield in money debt instruments, including mortgages. |
Basket Clause |
A provision in a governing act which allows trust and loan corporations to make investments and loans not authorized, but not specifically prohibited, of up to usually about 7% of assets. |
Bench Mark |
A durable post, block or other device established by surveyors to indicate a definite point from which elevations are set. |
Binder Insurance |
A written agreement (sometimes oral) whereby one party agrees to insure another party pending receipt of, and final action upon, the application for insurance. |
Blanket Mortgage |
A single mortgage registered against two or more individual parcels of real property. |
Blended Payments |
The method or repayment where periodical payments of principal and interest are made in such a way that the payments remain constant in amount. |
Blended Rate |
An interest rate on an increased loan which is derived from a formula taking into account the interest rate on the existing loan and the interest rate required on the monies. |
Block Funding |
The allotment by a lender of funds for a number of loans for one builder. |
Bona Fide |
In good faith, with valuable consideration and with absence of notice of any problems. Bonus 1) A sum paid by the mortgagor, or retained by the mortgagee from the advance of mortgage money, as part of the consideration for the making of the loan. 2) A sum paid by the mortgagor to the mortgagee as consideration for prepayment of all or part of the principal outstanding. |
Book Value |
The capital amount at which property is shown on the books of an account. Usually it is the original cost, less reserves for depreciation plus additions to capital. |
Borrower's Resolution |
A document certified by the secretary of the borrowing corporation, under corporate seal, containing a brief description of the property and the mortgage terms, and authorizing the borrowing of those specific monies. |
Borrowing By-Laws |
A document as evidence that a corporation has the power to mortgage property under its company charter. |
Breach of Contract |
Failure without legal reason to perform any promise which forms the whole or part of the agreed terms contained in the contract. |
Break-Even Point |
See Default Point. |
Bridge Financing |
See Interim Financing. |
Builder's Loan |
A mortgage loan made to a builder for the purpose of erecting the house and for assumption of that loan by an approved purchaser. |
Builder's Lien (Alberta) |
See Mechanics' Lien. |
Builder's 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 the buildings with reference to public health, fire protection and structural sufficiency. |
Bundle of Rights |
Legal rights - which real estate ownership embraces which include the right to use the property, to sell it, to lease it, to enter it or to give it away. 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. |
Buy-Sell Agreement |
An agreement between an interim lender and a permanent lender under which the, loan made by: the interim may be acquired by the permanent lender. |
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