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GLOSSARY
Breach of warranty
A breach of warranty is a violation of a sales agreement that pertains to the condition or title of the item or property being sold. In real estate, a breach of warranty occurs when the seller is unable to transfer clear title of property to the buyer.
Break the buck
Break the buck, pertaining to money market mutual funds, is when the fund's share price drops below $1. If a fund breaks the buck, the investors stand to lose principal.
Break-even point
Break-even point is the moment in time when the outlay of expenses has been recovered through sales. In business, the term is used in evaluating capital projects; decision-makers want to know long it will take to recoup expenses if a project is implemented. In options or securities transactions, the break-even point is the price at which the cost is equal to the net proceeds.
Breakup value
Breakup value is an estimate of what a company's total market capitalization would be if its divisions were separately operated, separately traded companies.
Bridge financing
Bridge financing is short-term debt that's collateralized by one asset to fund the purchase of another asset. When the collateral is sold, the debt must be repaid. Bridge financing is used in real estate transactions where a homeowner is purchasing a new home before the old home is sold.
Bridge loan
A bridge loan is the short term source of funds needed to pay for purchase of new property when you have not yet sold your previous property. Thus a bridge loan is taken out to supplement this shortfall in cash reserves for a downpayment. To qualify for this, the borrower must have a contract to sell the exisitng house. It is also known as the swing loan. Bridge loans are not used very often now as the second mortgage lenders lending at high value loans are increasing and sellers prefer offers from buyers who have already sold theri property.
Broker
A professional who is in the business of bringing two parties together and assisting in arranging funds, negotaiting contracts for the clients. He does not lend the money himself but instead earns a fee or commisssion for every transaction that he conducts. Brokers have different meanings for different situations. Realtors are agents who sometimes do their own broking or often work under brokers.
Broker loan
A broker loan is debt extended to an individual or company (the broker) that trades securities on another's behalf. Brokers might use the funds to fund customer margin accounts (where a customer makes an investment purchase on credit) or to fund the broker's own investment purchases.
Broker loan rate
Broker loan rate is the rate of interest, or finance charges, expressed as a percentage of the total debt, that a broker must pay when borrowing money to fund customers' margin accounts.
Broker premium
An amount of money paid to a mortgage broker who has served as a middleman in the mortgage process between the lender and the borrower. Lenders offer brokers wholesale rates and brokers add a surcharge to cover the cost of underwriting.
Broker Price Opinion - BPO
Broker price opinion, or BPO, is the market value of a real estate property, as estimated by a real estate professional. A BPO is not an appraisal; it's an educated determination of value based on sales trends, condition of the property, and recent sales prices of similar properties.
Brokerage
The office of a broker who earns a commission from bringing together a buyer and a seller in real estate or mortgage lending.
Brokerage (brokered) CD
A brokerage, or brokered, CD is a time deposit sold to individual investors by a brokerage firm, and can be traded on the secondary market. An investor might sell the CD prior to maturity without an interest penalty, but the sales price will depend on the time remaining until maturity, as well as other factors.
Brokerage account
A brokerage account is a deposit of securities assets held with a brokerage firm. The brokerage firm is an entity that buys and sells securities, for a fee, on behalf of its customers.
Brokered CD
A brokerage, or brokered, CD is a time deposit sold to individual investors by a brokerage firm, and can be traded on the secondary market. An investor might sell the CD prior to maturity without an interest penalty, but the sales price will depend on the time remaining until maturity, as well as other factors.