Search clear, original definitions for common hard-money, DSCR, refinance, debt-service, maturity, leverage, and prepayment terms.
Showing 20 of 20 terms
- Amortization
A schedule for reducing a loan balance through periodic payments. The amortization period can be longer than the contractual loan term, which may leave a balance due at maturity.
- Balloon payment
A comparatively large payment due at or near the end of a loan term because earlier payments did not fully repay the balance.
- Bridge loan
Short-term financing intended to cover a defined transition, such as an acquisition, renovation, lease-up, sale, or planned refinance.
- BRRRR
An investor shorthand for buy, rehab, rent, refinance, and repeat. Each stage carries separate property, financing, market, and execution risks.
- Cash-out refinance
A refinance in which the new loan pays off existing debt and may provide additional proceeds, subject to value, equity, program, property, and borrower requirements.
- Debt service
The payments required on debt over a stated period. A lender’s calculation may include principal and interest and may account for other property expenses.
- DSCR
Debt service coverage ratio. In rental-property financing, it generally compares qualifying property income with qualifying debt service, but inputs and methods vary by lender and program.
- Extension fee
A charge that may apply when a lender agrees to extend a loan beyond its original maturity. Availability, conditions, and cost depend on the loan documents and lender approval.
- Hard-money loan
Typically short-term, asset-focused financing used in situations such as acquisitions, renovations, distressed properties, or time-sensitive transactions. Structure and terminology vary by provider.
- Interest-only payment
A scheduled payment that covers interest but does not reduce principal during the interest-only period. The remaining balance must be addressed under the loan terms.
- Loan-to-cost
A ratio comparing the loan amount with an eligible project or acquisition cost. Which costs count depends on the lender and transaction.
- Loan-to-value
A ratio comparing a loan amount with the property value accepted for the transaction. Value source and treatment can vary by program.
- Maturity date
The contractual date when the remaining loan obligation becomes due unless the loan is paid off, extended, refinanced, or otherwise resolved under an agreed arrangement.
- Prepayment penalty
A charge that may apply when some or all of a loan is paid before a stated point. Investors should review the exact loan language and applicable law.
- Rate-and-term refinance
A refinance primarily used to replace an existing loan’s balance with a different rate, payment structure, or term, rather than to extract substantial additional proceeds.
- Recourse
A loan feature that may allow a lender to pursue a borrower or guarantor beyond the collateral after a default, subject to the documents and applicable law.
- Reserves
Funds or eligible assets a lender may expect to remain available for debt service, operating costs, repairs, or other obligations after closing.
- Seasoning
The length of time an owner has held a property, or that a loan, lease, value, or other condition has existed. Programs may use seasoning differently.
- Stabilized property
A property that has moved beyond a material renovation or lease-up phase and is operating in a condition and occupancy state that can be evaluated for its intended use.
- Yield maintenance
A prepayment formula intended to compensate a lender for some or all expected yield when a loan is paid early. The calculation is document-specific and can be complex.
How to use the glossary
Use the search, alphabetical navigation, and individual term links to prepare questions. Contract language, lender definitions, and applicable law control the actual transaction.
Frequently asked questions
Are these definitions lender guidelines?
No. They are educational explanations. A lender or legal document may define or calculate a term differently.
Can I link directly to one term?
Yes. Each term has a stable anchor and a copy-link control.
Does this guide state current lender requirements?
No. It provides a planning framework. Credit, leverage, DSCR, reserves, seasoning, property, documentation, pricing, and timing requirements vary and must be confirmed for the actual transaction.
Is this legal, tax, accounting, or individualized financial advice?
No. Use the guide to organize questions, then consult qualified professionals about your documents, obligations, taxes, ownership, and investment decisions.
Property-specific questions