All Terms, A to Z
- ARV (After-Repair Value)
ARV, or after-repair value, is the estimated value of a property after planned repairs or renovations. Used by California bridge lenders to size loans on investment properties. - Blanket Lien
A blanket lien encumbers more than one property as collateral for a single loan. - Bridge Loan
A bridge loan is a short-term private loan used to bridge the gap between two real estate transactions. - Bridge Loan Exit Strategy
A bridge loan exit strategy is the plan for repaying the loan. The two most common exits are selling the property or refinancing into long-term financing. - Cross-Collateralization
Cross-collateralization uses more than one property as security for a single loan. - Departing Residence
The departing residence is the home a bridge loan borrower currently owns and plans to sell. - DSCR (Debt Service Coverage Ratio)
DSCR, or debt service coverage ratio, measures rental income against loan payments. - Fix-and-Flip
Fix-and-flip is a real estate investment strategy of buying, renovating, and selling a property for profit. - Hard Money Loan
A hard money loan is a short-term, asset-based loan from a private lender. - HELOC (Home Equity Line of Credit)
A HELOC is a revolving line of credit secured by home equity. - Interest Reserve
An interest reserve is a portion of the loan set aside to cover monthly payments during the loan term. - LTV (Loan-to-Value)
LTV, or loan-to-value ratio, is the loan amount divided by the property value. - Non-Contingent Offer
A non-contingent offer is a real estate purchase offer with no financing or sale contingency. - Note Rate vs APR
The note rate is the stated interest rate; APR includes fees and reflects total borrowing cost. - Origination Fee
An origination fee is a one-time charge paid to the lender at closing for processing the loan. - Points (Mortgage)
Mortgage points are upfront fees; each point equals 1% of the loan amount. - Prepayment Penalty
A prepayment penalty is a fee charged when a loan is paid off before a specified date. - Private Lender (California)
A private lender is a non-bank individual or entity that makes real estate loans funded by private capital. - Rehab Loan
A rehab loan funds property purchase and renovation costs together. - Swing Loan
A swing loan is another name for a bridge loan, used to finance the purchase of a new property before the existing property sells.