Balloon Loan
A loan that has level monthly payments that will amortize it over a stated term (e.g., 30 years) but that requires a lump sum payment of the entire principal balance at the end of a shorter term (e.g., 10 years).

Balloon Payment
An installment payment which is larger (most often much larger) than the other scheduled payments. It is usually the last payment. If a note is written for $50,000 at a fixed 9.0% rate of interest with payments based on an amortization schedule of 30 years and a balloon payment due in 5 years, the first 60 payments will each be $402.31 (the normal payment for a 30 year loan at 9.0% interest) and the last payment will be $47,940.15 which will be the outstanding balance remaining after the 60th payment.

Basis Point
One 100th of 1%.

Bird Dog
Someone who identifies a potential good real estate investment opportunity and passes that deal on to another investor for a fee.

Blanket Mortgage
A single mortgage which attaches to more than one property.

Broker Price Opinion (BPO)
Real estate broker provides an estimated value of a property

Building Permit
Permission granted by a local government or agency to build a specific structure at a specific site.

Buy Down
A payment of discounts points in exchange for a lower rate of interest. It has the effect of providing the lender with a greater yield today in exchange for a lower yield in the future. (See definition of “discount points” below.).

Bridge Loan
Mortgage financing between the termination of one loan and the beginning of another loan.