Every term you will hear from a California private lender, defined the way we would explain it across a desk. No jargon, no fine print.
A short-term real estate loan from a private lender, approved mainly on the property's value rather than the borrower's income or credit.
A non-bank lender — a company or individual — that lends its own or investors' capital on real estate. Fidelity Funding is a direct private money lender, meaning we fund with our own capital.
A lender that funds loans with its own money instead of brokering your file to someone else. Direct lenders control approval and can move faster.
What a property will be worth after renovations are finished. Fix-and-flip loans are often sized as a percentage of ARV.
The loan amount divided by the property's current value. A $700,000 loan on a $1,000,000 property is 70% LTV. Lower LTV means more equity and less risk.
The loan amount divided by the total project cost (purchase price plus rehab budget). Used to size renovation and construction loans.
The property's monthly rent divided by its monthly loan payment. A DSCR of 1.2 means the rent is 120% of the payment. DSCR loans qualify on this number instead of your personal income.
A short-term loan that 'bridges' the gap between buying a property and a longer-term outcome — selling it, refinancing it, or stabilizing it with tenants.
A short-term loan used to buy a property, renovate it, and sell it for a profit. Usually includes a holdback for the rehab budget.
An upfront loan fee. One point equals 1% of the loan amount — 2 points on a $500,000 loan is $10,000, typically paid at closing out of escrow.
A monthly payment that covers only the interest, not the loan balance. Most hard money loans are interest-only, which keeps payments lower during a project.
The full remaining loan balance, due in one payment at the end of the term. Short-term loans end with a balloon that is paid off by selling or refinancing.
A written summary of the proposed loan: amount, rate, points, term, and conditions. It lets you see the whole deal before paying for anything.
Renovation money held back from the initial funding and released in stages ('draws') as work is completed and inspected.
The recorded document that secures a California real estate loan against the property — California's version of a mortgage. It lets the lender foreclose if the loan isn't repaid.
The loan that gets repaid first if a property is sold or foreclosed. Most hard money loans require first position.
A loan behind an existing first loan. Riskier for the lender, so rates are higher and loan amounts smaller.
Replacing your current loan with a larger one and taking the difference in cash — often used to pull equity out of one property to buy the next.
Buy, Rehab, Rent, Refinance, Repeat — a strategy where investors buy with short-term money, renovate, rent the property, then refinance into a long-term DSCR loan and recycle the cash.
A loan used for investment or business reasons rather than personal ones. Hard money loans are business-purpose only — never for a home you live in.
The lender's review of the deal — property value, title, borrower equity, and exit plan — before final approval.
A neutral third party that holds the money and documents during a sale or loan, and releases them only when both sides have met the agreed terms.
Insurance that protects the lender (and buyer) against ownership disputes, unpaid liens, or recording errors on the property.
A document — usually a bank statement or lender letter — showing you have the cash to close. Sellers often require it with an offer.
A fee for paying a loan off early. Many of our short-term loans have no prepayment penalty; DSCR loans often trade a small penalty for a lower rate.
How the loan gets paid off: selling the property, refinancing into a long-term loan, or paying it down. Every short-term loan is underwritten around a realistic exit.
California's standard foreclosure process, handled outside of court under a deed of trust. It has a legally required timeline of notices before a property can be sold.
Using more than one property as security for a single loan — sometimes used to reduce or eliminate a down payment.
Fidelity Funding Corp · Direct California private money lender since 2006
450 N Brand Blvd, 6th Floor · Glendale, CA 91203 · Mon-Fri 8AM-6PM PT