Tools & Guides
Everything you need to navigate the lending process — calculators, a plain-English glossary, document checklists, and a step-by-step borrower's guide.
Amortization
The process of paying off a loan through regular payments of principal and interest over time.
APR (Annual Percentage Rate)
The yearly cost of a loan including interest and fees, expressed as a percentage — useful for comparing offers.
ARV (After-Repair Value)
The estimated value of a property after renovations are completed, used heavily in fix-and-flip lending.
Balloon Payment
A large lump-sum payment due at the end of certain loans after smaller periodic payments.
Bridge Loan
Short-term interim financing used to 'bridge' the gap until permanent financing or a sale is secured.
Cap Rate
Net operating income divided by property value — a key measure of a commercial property's return.
Closing Costs
Fees and expenses paid at the completion of a real estate transaction, separate from the down payment.
DSCR (Debt-Service Coverage Ratio)
Net operating income divided by total debt service; lenders use it to gauge a property's ability to cover its loan.
Debt-to-Income (DTI)
The percentage of gross monthly income that goes toward debt payments — a core residential underwriting metric.
Equity
The portion of a property's value that the owner truly owns, calculated as value minus outstanding loan balance.
Escrow
An account held by a third party to manage funds such as taxes and insurance on behalf of a borrower.
Hard Money Loan
An asset-based short-term loan secured primarily by the value of real estate rather than borrower credit.
Interest-Only Loan
A loan where payments cover only interest for a set period, keeping early payments lower.
Jumbo Loan
A mortgage that exceeds conforming loan limits, typically used for high-value properties.
LTV (Loan-to-Value)
The loan amount divided by the property's value — a primary measure of lending risk.
Origination Fee
A fee charged by a lender to process and originate a new loan, usually a percentage of the amount.
PMI (Private Mortgage Insurance)
Insurance required on many conventional loans with less than 20% down; it protects the lender.
Points
Upfront fees paid to a lender at closing, where one point equals 1% of the loan amount, often to lower the rate.
Prepayment Penalty
A fee some loans charge if the borrower pays off the balance earlier than scheduled.
Refinance
Replacing an existing loan with a new one — often to lower the rate, change the term, or take cash out.
Term Sheet
A non-binding document outlining the proposed terms and conditions of a loan before final approval.
Underwriting
The lender's process of evaluating risk and verifying a borrower and property before approving a loan.
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