GLOSSARY
Plain-language terms used across this website.
General definitions to help with reading the rest of this site. These are not legal definitions.
- After-repair value
- An estimate of a property's value after planned renovations are complete.
- Appraisal
- A professional assessment of a property's value.
- Borrower
- The individual responsible for repaying the financing.
- Borrowing entity
- A company or legal entity that borrows in place of an individual.
- Bridge loan
- Short-term financing intended to cover a defined period between two events, such as acquisition and sale.
- Cash-out
- Accessing available equity in a property as loan proceeds.
- Closing
- The point at which a financing transaction is finalised.
- Collateral
- Property or assets pledged to secure financing.
- Debt-service coverage ratio
- A general measure comparing property income to debt obligations.
- Draw
- A disbursement of financing released at a defined project stage, when applicable.
- Equity
- The value of a property beyond any amount owed against it.
- Exit strategy
- The intended way financing is expected to be repaid.
- Fix and flip
- Acquiring and renovating a property with the intention of resale.
- Fix to rent
- Acquiring and renovating a property with the intention of renting it out.
- Loan-to-cost
- A general ratio comparing financing to total project cost.
- Loan-to-value
- A general ratio comparing financing to property value.
- Personal guarantee
- A borrower's personal commitment to repay financing, when applicable.
- Purchase price
- The agreed price for acquiring a property.
- Rehabilitation budget
- The estimated cost of planned property improvements.
- Scope of work
- A description of the planned renovation or improvement work.
- Stabilisation
- The point at which a property reaches consistent, expected performance.
- Term sheet
- A document summarising proposed financing terms, when issued.
- Underwriting
- The formal process of reviewing and approving a financing request.
These definitions are general and are not legal definitions.