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26. Bridge loan

A form of second trust that is collateralized by the borrower’s present home (which is usually for sale) in a manner that allows the proceeds to be used for closing on a new house before the present home is sold. Also known as “swing loan.”

27. Broker

A person who, for a commission or a fee, brings parties together and assists in negotiating contracts between them. See mortgage broker

28. Building code

Local regulations that control design, construction, and materials used in construction. Building codes are based on safety and health standards.

29. Call option

A provision in the mortgage that gives the mortgagee the right to call the mortgage due and payable at the end of a specified period for whatever reason.

30. Cap

A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or mortgage payments may increase or decrease. See lifetime payment cap, periodic payment cap, and periodic rate cap.

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