The Grand Glossary: Real Estate Loan Lingo You Shouldn’t Pretend to Know Anymore
- David Marsh
- Jun 13
- 2 min read
Let’s face it: mortgage speak can feel like a secret language designed to keep the rest of us confused. But at Grand Funding, we believe knowledge is power — especially when it comes to financing your real estate dreams.
So here it is: a smart, no-BS, SEO-friendly glossary of real estate loan terms, translated into actual English, so you can stop nodding awkwardly in lender meetings.
⸻
🧠 Amortization
The process of gradually paying off your loan in fixed payments. Early on, you’re mostly paying interest. Later, you’re chipping away at the principal. It’s the long-haul jog of loan repayment.
🔁 ARMs (Adjustable-Rate Mortgages)
These start with a lower interest rate, then adjust (usually up) after a fixed period. Great if you plan to refinance or move soon. Dangerous if you like stability and sleep.
🧮 DSCR (Debt Service Coverage Ratio)
Used by lenders to evaluate if your rental income covers your mortgage. If your rent is more than your loan payment, you’re golden. If not, better have strong personal financials or a great story.
💸 Equity
The difference between your home’s value and what you owe. Equity = power. It’s what you can borrow against, cash out from, or humblebrag about at dinner parties.
🧾 Escrow
A neutral third party holds funds or documents until all the deal conditions are met. Think of it like a chaperone that makes sure everyone behaves until the deal is done.
🧱 Hard Money Loan
A short-term, asset-based loan — fast and flexible but often pricey. Perfect for flips, rehabs, or “I need this property yesterday” situations.
🧰 LTV (Loan-to-Value)
How much you’re borrowing compared to your property’s worth. Lower LTV = lower risk. Most lenders prefer 75–80% max.
🏗️ Bridge Loan
Temporary financing while you wait for longer-term financing to kick in. Real estate’s version of “fake it ‘til you make it.”
🧾 Rate Lock
When a lender guarantees your interest rate for a set period. Crucial when rates are rising (aka now).
🪙 Points
Fees you pay to lower your interest rate. 1 point = 1% of your loan amount. A way to pay now to save later — if you’re planning to stick around.
🧠 Underwriting
The process where a lender dissects your finances to decide if you’re trustworthy. Yes, they’ll look at everything. But we’ll help you prep so it’s painless(ish).
⸻
Grand Funding’s Final Word:
You don’t need to know everything. You just need a funding partner who does — and who won’t condescend when you ask, “Wait, what’s a DSCR again?”
Whether you’re buying, building, refinancing, or investing, our job is to translate mortgage-speak into clear steps — and get you the best deal while we’re at it.
⸻
Sources:
