Loan types, lending terms, mortgage products, hard money lending, and financing strategies for real estate.
Master financing & mortgages with our progressive approach
Foundation terms you need to know first (57 terms)
A traditional bank mortgage is a conventional loan provided by a financial institution to purchase real estate, following guidelines from Fannie Mae and Freddie Mac, commonly used by investors to finance properties.
A repair credit is a financial concession from a seller to a buyer at closing, typically used to cover the cost of necessary repairs identified during a home inspection, reducing the buyer's upfront cash needed.
Principal paydown is the portion of your mortgage payment that reduces the outstanding loan balance, directly building equity in your real estate investment over time.
An owner-occupied property is real estate where the owner lives as their primary residence, often qualifying for favorable financing, lower down payments, and significant tax benefits.
A credit bureau is a company that collects and maintains financial information about individuals, compiling it into credit reports used by lenders to assess creditworthiness.
Complex strategies and professional concepts (44 terms)
Slow BRRRR is an advanced real estate investment strategy that extends the traditional BRRRR (Buy, Rehab, Rent, Refinance, Repeat) cycle over a longer period, often several years, to maximize equity appreciation and mitigate market risks.
A legally binding contract that alters the priority of liens on a property, allowing a senior lienholder to voluntarily place their claim in a junior position to another, typically to facilitate new financing or complex transactions.
Tax-exempt debt refers to bonds or other debt instruments issued by governmental entities or qualified private entities, where the interest earned by the bondholder is exempt from federal, and often state and local, income taxes.
Capital stacking is an advanced real estate financing strategy involving the layering of multiple debt and equity instruments to fund a property acquisition or development, optimizing the capital structure for specific risk-return profiles.
Premium financing is a sophisticated financial strategy where an investor borrows funds from a third-party lender to pay the premiums on a large insurance policy, typically a life insurance policy or substantial commercial property insurance, using the policy itself or other assets as collateral.
A contractual provision allowing a party to be freed from specific obligations or to free certain assets from a lien or encumbrance upon the fulfillment of predefined conditions, often involving a payment or performance.
Remote closing allows real estate transactions to be completed without all parties physically present, leveraging digital tools for document signing, notarization, and fund transfers. It offers convenience and efficiency, especially for out-of-state investors.
A repair credit is a financial concession from a seller to a buyer at closing, typically used to cover the cost of necessary repairs identified during a home inspection, reducing the buyer's upfront cash needed.
A reverse mortgage allows homeowners, typically seniors aged 62 or older, to convert a portion of their home equity into tax-free cash without having to sell their home or make monthly mortgage payments. The loan is repaid when the last borrower leaves the home permanently.
An SBA Loan is a small business loan partially guaranteed by the U.S. Small Business Administration, primarily used for owner-occupied commercial real estate with favorable terms and lower down payments.
Scheduled capital calls are pre-planned requests by a fund manager or syndicator for investors to contribute committed capital on specific dates, typically for real estate projects or acquisitions.
A seasoning period is a mandatory waiting time, typically 6-12 months, that a borrower must own a property before qualifying for a cash-out refinance or other equity-based loans, implemented by lenders to mitigate risk and verify property value.
The secondary mortgage market is a financial marketplace where existing mortgage loans and mortgage-backed securities (MBS) are bought and sold by investors, providing liquidity to primary lenders and influencing interest rates.
A secured loan is a debt backed by collateral, such as real estate, which the lender can seize if the borrower defaults, offering lower interest rates due to reduced risk.
A security agreement is a legal document that grants a lender a security interest in specified collateral, typically real estate or other assets, to secure the repayment of a debt. It outlines the terms under which the collateral can be claimed if the borrower defaults.
A security instrument is a legal document that pledges a borrower's property as collateral for a loan, giving the lender the right to seize the property if the borrower defaults on the debt.
Seller concessions are contributions made by the seller towards the buyer's closing costs, reducing the amount of cash the buyer needs to bring to the closing table. These are negotiated as part of the purchase agreement and are subject to lender-imposed limits.
Explore complementary areas that build on financing & mortgages concepts
Personal budgeting, expense tracking, cash flow management, emergency funds, and savings strategies.
Credit scores, debt consolidation, loan management, credit repair, and debt payoff strategies.
Macroeconomic concepts, interest rates, inflation, Federal Reserve policy, and economic cycles.
Wills, trusts, estate taxes, succession planning, beneficiary planning, and wealth preservation.