What am I looking at?

Lenders send several different documents and use the names loosely. Here is what each one actually is, and a plain-English dictionary of every term this tool tracks.

They are all loan offers

A quote, a term sheet, a letter of intent, a loan estimate and a commitment letter are the same thing at different levels of detail: a lender describing a loan it might make you. This tool treats them all as loan offers and standardizes whatever each one happens to include.

The level of detail is the thing to watch. They populate the same fields — rate, term, leverage, fees, prepayment, recourse — but a quote fills in three of them and a commitment letter fills in all of them. A missing term is not an absent cost. It is a cost nobody has told you about yet, which is why this tool lists every term it looked for, including the ones your offer left blank.

Only two of them bind anyone. A commitment letter binds the lender. An LOI often binds you — to third-party costs, and sometimes to not shopping the deal. The rest bind nobody, however official they look.

The six offers you will see, least to most detailed

Quote

Detail: Least detailBinding: Not bindingAnyone, often verbally or by text

A rate and a loan amount, and not much else. Useful for a first pass on whether a deal is even close, and for nothing after that.

Watch out: A quote leaves out everything that decides what the loan actually costs — the fees, the prepayment terms, whether interest runs on the full commitment. A cheap-sounding quote routinely becomes the expensive offer once those appear.

Term Sheet

Detail: Moderate detailBinding: Not bindingCommercial and private lenders

One or two pages summarizing what a lender will do, issued before they have fully underwritten your deal. A starting position, not a promise.

Watch out: Almost everything is subject to change after appraisal and underwriting. The phrase to look for is "subject to" — whatever follows it is the lender’s escape hatch.

Letter of Intent (LOI)

Detail: Moderate detail, signedBinding: Not binding on the lender — often binding on youPrivate and construction lenders

Functionally the same document as a term sheet, with a signature line. Signing does not commit the lender to lend.

Watch out: Read what your signature agrees to. It commonly makes you liable for appraisal, legal and inspection costs whether or not the loan ever closes, and sometimes stops you from shopping the deal.

Loan Estimate

Detail: Most detail, standardizedBinding: Binding on fees, within tolerancesConsumer mortgage lenders only

A standardized three-page federal form every consumer mortgage lender must issue within three business days of your application. Because the format is fixed, two of them compare line by line.

Watch out: You will probably never get one on an investment property. Business-purpose loans — DSCR, fix & flip, bridge, commercial — are exempt from the TRID rules that require it. That exemption is the whole reason comparing investor offers is hard, and the reason this tool exists.

Commitment Letter

Detail: Most detail, deal-specificBinding: Binding on the lenderAll lenders, at the end of the process

The real thing. Issued after underwriting is complete, it obligates the lender to fund on the stated terms provided you satisfy the listed conditions.

Watch out: The conditions list is where the risk moved to. A commitment with twelve open conditions is closer to a term sheet than to money in your account.

Rate Sheet / Guideline Matrix

Detail: Not deal-specificBinding: Not an offer at allWholesale and broker channels

A grid of pricing and maximum leverage by credit score, LTV and property type. The menu, not the order.

Watch out: Useful for sanity-checking a quote against what the lender publishes. Add-ons stack, so the headline rate is rarely the rate you get.

What they have in common

— All of them are a lender telling you what it might do, at some level of detail.
— All of them are written by the lender, for the lender.
— All of them should state a loan amount, a rate, a term, and what it costs to get the money. The ones that skip those are not cheaper, just vaguer.
— None of them are the loan documents. The promissory note and mortgage arrive later, and they govern.

How they differ

How much is filled in?: Quote: a rate and an amount · Term sheet and LOI: the main terms · Commitment and Loan Estimate: everything
Is the lender bound?: Only the commitment letter. The Loan Estimate binds fees within tolerances.
Are you bound?: An LOI often binds you to costs, and sometimes to not shopping the deal. The rest bind nobody.
When does it arrive?: Quote, term sheet and LOI come before underwriting. A commitment comes after.
Is the format standardized?: Only the Loan Estimate — and investors rarely get one.

Jargon dictionary

Every term this tool looks for, in plain English, with the other names lenders use for the same thing. 70 entries.

70 entries

Economics

Loan Amount: The principal the lender is offering to advance.; Everything else is priced off this number. On a bridge loan it may be a commitment split between an initial advance and a rehab holdback, and on a credit facility it is a limit rather than an amount — those are three different things.; Also called: Loan Amount · Commitment · Facility Amount · Total Loan Amount · Amount
Loan Purpose: The transaction type this loan is priced as — acquisition/purchase, rate-and-term refinance that replaces existing debt, or cash-out refinance that returns equity to the borrower. This is how the borrower comes to own or re-finance the asset, not what will be built or renovated on it: a scope of work, a construction description or a property description is not a loan purpose.; Two sheets are not comparable until you know this. Purpose sets the LTV ceiling and the price before any other factor — a cash-out refinance is typically capped several points below a purchase and carries a rate add-on, so a cash-out quote that looks worse than a purchase quote may in fact be the better offer. A sheet that never states it is quoting against an assumption you have not seen.; Also called: Loan Purpose · Purpose · Transaction Type · Purchase · Rate and Term Refinance · Rate/Term Refinance · Cash-Out Refinance · Cash Out Refi · Refinance
Loan-to-Value (LTV): The loan amount as a percentage of the property value — usually the lesser of purchase price and appraised value.; Sets how much cash you bring. It is rarely a single number: it varies by loan purpose (purchase, rate-and-term, cash-out), by term length, and by whether the loan is interest-only.; Also called: LTV · Maximum LTV · Loan to Value · Advance Rate
Loan-to-Cost (LTC): The loan as a percentage of total project cost — purchase price plus renovation budget plus, sometimes, closing costs.; On any project with construction spend this binds before LTV does. LTC and LTV are separate constraints and both apply; the lower one governs your actual proceeds.; Also called: LTC · Loan to Cost · LTP · Loan to Purchase
Loan-to-After-Repair-Value (LTARV): Total loan as a percentage of the appraised value the property will have once the work is finished.; The ceiling on a renovation loan. If the ARV appraisal disappoints, this is the constraint that cuts your proceeds, and you cover the gap in cash at closing.; Also called: LTARV · ARV LTV · Loan to ARV · LTV (after repair)
As-Is Value: What the property is worth today, before any renovation — the appraised or broker-opined value in its current condition.; This is the number the day-one advance is actually sized against, and it is the only way to check the rest of the sheet against itself: purchase price, as-is value, rehab budget and ARV have to reconcile, and LTC and LTV are computed off different ones of them. Without it you cannot tell whether an advance is constrained by cost or by value, which is exactly what decides how much cash you bring to closing.; Also called: As-Is Value · As Is Value · Current Value · As-Is Appraised Value · Present Value · Purchase Price
After Repair Value (ARV): The appraised value the property is expected to reach once the renovation described in the scope of work is complete.; The most important number in a renovation deal. Your proceeds, your exit, and your profit all key off it, and the lender will use their appraiser, not your estimate.; Also called: ARV · After Repair Value · As-Completed Value · Stabilized Value
Interest Rate: The annual rate charged on the outstanding balance.; The headline number, and the one most likely to be compared in isolation. On a bridge loan it means very little without knowing the accrual basis and the minimum interest.; Also called: Interest Rate · Rate · Note Rate · Coupon · Pricing
Rate Structure (Fixed / Floating, Index, Spread, Floor): Whether the rate is fixed for the term or floats over an index such as SOFR, plus the spread added to that index and any floor below which the rate cannot fall.; A floating rate with a floor is a one-way bet against you: you get none of the benefit if rates fall below the floor, and all of the exposure if they rise.; Also called: Spread · Margin · Applicable Margin · Index · Floor · Accrual Rate
Rate Cap Requirement: On a floating-rate loan, a requirement that the borrower buy an interest rate cap — a derivative that pays out if the index rises above a strike.; Caps cost real money up front and the price swings with volatility. A term sheet that requires one without saying so leaves a five- or six-figure cost out of your budget.; Also called: Rate Cap · Interest Rate Cap · Cap Agreement
Origination Fee / Points: The lender's fee for making the loan, stated as a percentage of the loan amount.; Paid at closing out of your cash. On a 12-month bridge loan, two points is equivalent to roughly two additional points of annual rate — on a 30-year loan it is almost noise.; Also called: Origination Fee · Points · Origination Points · Loan Fee · Commitment Fee
Discount Points (Rate Buydown): Optional points paid at closing to reduce the interest rate.; Whether a buydown pays depends entirely on how long you hold the loan. On a DSCR loan you plan to refinance in three years, most buydowns lose money.; Also called: Discount Points · Buydown · Rate Buydown
Exit Fee: A fee charged at payoff, usually a percentage of the original or outstanding balance.; Easy to overlook because it is not due until the end. Frequently waived if you take the same lender's permanent financing — which is a lock-in dressed up as a courtesy, and worth pricing as one.; Also called: Exit Fee · Back-End Fee · Payoff Fee
Term: How long until the loan matures and the full balance is due.; On a short-term loan this is your deadline to sell or refinance. On a commercial loan with a longer amortization it sets when the balloon lands.; Also called: Term · Loan Term · Maturity · Initial Term
Amortization: The schedule over which principal is repaid. Longer amortization means lower payments and a larger balance left at maturity.; When amortization is longer than the term, you have a balloon. A 30-year amortization on a 7-year term means most of the principal is still outstanding when it comes due.; Also called: Amortization · Amort · Amortization Period
Interest-Only Period: A period during which only interest is due and the principal balance does not reduce.; Improves cash flow early on, but you build no equity during it, and lenders normally still qualify you on the fully amortizing payment — so it helps your wallet, not your approval.; Also called: Interest Only · IO Period · Partial IO · Full-Term Interest Only
Interest Accrual Basis (Full Balance vs. Drawn): Whether interest is charged on the entire committed loan amount from day one ("full boat" or "dutch") or only on funds actually drawn ("non-dutch").; The single largest hidden cost difference between two bridge loans that quote the same rate. On a deal with a large rehab holdback drawn over nine months, full-balance accrual can cost several thousand dollars more than the headline rate implies.; Also called: Dutch Interest · Non-Dutch · Full Boat · Accrual on Committed Amount
Day Count / Accrual Convention: The convention used to compute interest — 30/360, Actual/360, or Actual/365.; Actual/360 charges interest for 365 days on a 360-day denominator, which costs about 1.4% more per year than 30/360 at the same stated rate. It is almost never explained.; Also called: Accrual · Day Count · 30/360 · Actual/360 · Basis
Extension Options: The right to extend maturity, the fee for doing so, and the conditions you must meet to qualify.; Projects run late. An extension you cannot actually qualify for — because it requires the property listed, or the rehab 90% complete — is not protection.; Also called: Extension · Extension Option · Extended Maturity

Credit Tests

Minimum DSCR: The minimum ratio of property income to debt service the lender requires. A 1.25x requirement means income must be 25% above the payment.; This is the test that decides whether the loan is approved at the size you want. A lower minimum means you can borrow more against the same property.; Also called: DSCR · DCR · Minimum DSCR · Debt Coverage Ratio · Debt Service Coverage
DSCR Calculation Method: How the ratio is actually computed — gross rent over PITIA, or net operating income after an expense factor over debt service, and whether the payment used is the amortizing one.; Two lenders can both say "1.10x minimum" and mean completely different things. Gross rent over PITIA is a far easier test than NOI after a 30% expense factor over amortizing debt service. This is the most important unstated term in the DSCR category.; Also called: DSCR Calculation · Coverage Test · Qualifying Method
Debt Yield: Net operating income divided by the loan amount, expressed as a percentage.; Unlike DSCR and LTV it does not move with interest rates or appraised value, so lenders use it as the backstop test. It often binds before LTV on a low-cap-rate asset.; Also called: Debt Yield · DY
Income Qualification Source: Which rent figure the lender uses — the in-place lease, market rent from a Form 1007 rent schedule, or trailing short-term-rental revenue.; Determines whether a below-market lease or a vacant unit sinks your loan. Lenders commonly use the lesser of actual and market, which caps the benefit of a strong lease.; Also called: Rent Qualification · Form 1007 · Market Rent · Income Documentation
Short-Term Rental Income Treatment: How revenue from short-term rental platforms is counted — typically trailing twelve months of actual receipts with a haircut factor applied.; The haircut is applied before the coverage test, so a 17% reduction in counted revenue can be the difference between approval and decline. Terms are also tighter across the board: lower LTV, higher minimum DSCR, more required liquidity.; Also called: STR Income · Short Term Rental · Airbnb Income · Vacation Rental Income
Minimum Credit Score: The minimum qualifying credit score, usually the mid-score of the primary guarantor.; Prices the loan in tiers as much as it gates it. A 20-point improvement can be worth a quarter point in rate or five points of leverage.; Also called: FICO · Credit Score · Minimum FICO · Qualifying Score
Borrower Experience Requirement: The number of comparable projects completed, used both to qualify the borrower and to set the pricing tier.; In the bridge category experience is priced directly: the gap between a first-timer and a ten-deal operator can be two points of rate and ten points of leverage.; Also called: Experience · Track Record · Experience Tier · Completed Exits
Eligible Property Types: The stated rule about which property types this program will lend on, and which it excludes or prices differently — unit count, condominium, rural, mixed-use, manufactured, short-term rental. This is the eligibility policy the sheet sets out, not a description of the subject property: "two detached single-family residences" is what this deal happens to be, whereas "1–4 unit non-owner-occupied; no rural, no manufactured" is the rule. If the sheet only describes the subject property and states no policy, this term is absent.; This is the most common reason a quote evaporates between term sheet and underwriting. Eligibility is decided by the program, not the deal, so a sheet issued before anyone looked at the subject property can be withdrawn in full once they do. A rate you cannot actually use on your property is not a rate.; Also called: Eligible Properties · Property Type · Eligible Property Types · Permitted Collateral · Property Eligibility · Ineligible Properties · Collateral Type
Citizenship / Residency Requirement: Whether the borrower must be a US citizen or permanent resident, and the terms offered to a foreign national or a borrower on a visa.; A standard overlay that is rarely printed on the first page. Foreign-national programs exist at most investor lenders but carry their own pricing, a lower LTV ceiling, and documentation the borrower cannot produce quickly — passport, visa, US credit alternative, and often reserves held in a US account. Discovering it at underwriting costs the rate lock.; Also called: Citizenship · Residency · Foreign National · Foreign National Program · US Citizen · Permanent Resident · Visa Status · ITIN
Seasoning Requirement: How long you must have owned the property before the lender will do a refinance, especially a cash-out.; The gate on the BRRRR strategy. Fail it and you either wait or you refinance against your purchase price rather than the improved value, which can strand most of your equity.; Also called: Seasoning · Ownership Seasoning · Title Seasoning
Minimum Occupancy: The physical or economic occupancy the property must maintain to qualify and to stay in compliance.; An ongoing test, not just a closing condition. Falling below it can trigger cash management or an event of default.; Also called: Occupancy · Minimum Occupancy · Economic Occupancy
Ongoing Financial Covenants: Tests you must keep meeting after closing — net worth, liquidity, DSCR, and reporting obligations.; These are how a performing loan becomes a defaulted one without you ever missing a payment. A liquidity covenant tested annually can be breached by a bad quarter.; Also called: Covenants · Financial Covenants · Net Worth Covenant · Liquidity Covenant

Structure & Risk

Recourse: Whether the lender can pursue your personal assets beyond the property. Non-recourse limits them to the collateral; full recourse does not.; The single most consequential non-economic term. A quarter point of rate is a poor trade for personal liability on the entire balance, and borrowers make that trade all the time without noticing.; Also called: Recourse · Non-Recourse · Guaranty · Personal Guarantee · Recourse Requirements
Non-Recourse Carve-Outs (Bad Boy): The acts that convert a non-recourse loan into a recourse one — typically fraud, misapplication of funds, waste, unpermitted transfers, and voluntary bankruptcy.; Term sheets almost never list them. Some carve-out sets are so broad that ordinary operating missteps trigger full personal liability, and you will not discover that until the loan documents arrive.; Also called: Carve-Outs · Bad Boy Carveouts · Recourse Obligations · Springing Recourse
Completion Guaranty: A personal obligation to finish the construction in accordance with the approved plans and budget, funding any overrun yourself.; Separate from and additional to a payment guaranty. It means cost overruns come out of your pocket without limit, whatever happens to the loan.; Also called: Completion Guaranty · Performance Guaranty
Loan In Balance Requirement: A requirement that undisbursed loan proceeds plus your committed equity always be enough to finish the project. If the lender decides they are not, you deposit the shortfall in cash.; The provision most likely to demand unexpected cash on short notice, and the lender usually has sole discretion to make the call.; Also called: In Balance · Loan In Balance · Balancing Requirement
Entity / Vesting Requirement: The legal entity that must hold title — commonly an LLC, sometimes a bankruptcy-remote single purpose entity with an independent manager.; Business-purpose loans do not close in an individual name. SPE requirements add legal cost and, where a non-consolidation opinion is required, several thousand dollars and a week of time.; Also called: Vesting · Borrowing Entity · SPE · Single Purpose Entity · Eligible Borrower
Cash Management / Lockbox: An arrangement where property income flows into a lender-controlled account. "Springing" means it activates only on a trigger; "hard" means it applies from day one.; Once it springs, you lose day-to-day control of your cash flow, and the cure conditions are usually harder to meet than the trigger was to trip.; Also called: Lockbox · Cash Management · Cash Sweep · Springing Lockbox
Assumption Rights: Whether a future buyer can take over your loan, and at what cost.; An assumable low-rate loan is a genuine asset when you sell into a higher-rate market. A non-assumable one forces the buyer to finance at market.; Also called: Assumption · Assumable · Transfer
Subordinate / Supplemental Financing: Whether you may place additional debt behind this loan — a second mortgage, mezzanine debt, or preferred equity.; Determines whether you can pull equity out later without refinancing the whole stack.; Also called: Subordinate Financing · Supplemental Loan · Secondary Financing · Mezzanine
Cross-Collateralization and Cross-Default: Whether multiple properties secure the same debt (cross-collateralized) and whether a default on one triggers default on all (cross-defaulted). These are separate things.; Cross-default without cross-collateralization is standard on credit facilities and means one bad deal can accelerate every loan you have with that lender.; Also called: Cross-Collateralized · Cross-Default · Blanket Lien · Release Provisions
Default Interest Rate: The rate that applies to the entire balance once the loan is in default, including at maturity.; A loan that reaches maturity unpaid is in default. On a bridge loan where the sale slips by a month, default interest can cost more than the extension fee you were trying to avoid.; Also called: Default Rate · Default Interest · Penalty Rate
Environmental Indemnity: A separate personal indemnity for environmental liabilities, which typically survives repayment of the loan and is carved out of non-recourse protection.; It outlives the loan. Even on a non-recourse deal, environmental exposure usually remains personal, and it does not go away when you pay the loan off.; Also called: Environmental Indemnity · Hazardous Materials Indemnity

Prepayment

Prepayment Structure: What it costs to pay the loan off early — a step-down penalty, yield maintenance, defeasance, a lockout period, or nothing at all.; Determines whether you can refinance or sell when you want to. A five-year step-down on a property you intend to flip in eighteen months is a serious cost that never appears in the rate.; Also called: Prepayment Penalty · Prepayment Provisions · Prepayment Availability · Pre-Payment Premium · Step-Down · Yield Maintenance · Defeasance
Minimum Interest / Guaranteed Interest: A minimum number of months of interest you owe even if you repay sooner.; Economically a prepayment penalty, but never labelled as one, so it survives the question "is there a prepayment penalty?" A three-month minimum on a flip you finish in six weeks is roughly two extra months of interest for nothing.; Also called: Minimum Interest · Guaranteed Interest · Minimum Term Interest · Yield Guarantee
Lockout Period: A period during which the loan cannot be prepaid at all, at any price.; Not a cost but an absolute bar. If a sale opportunity appears during lockout, you cannot take it without the lender's consent.; Also called: Lockout · Lock-out Period · No-Call Period
Open Period: A window before maturity during which the loan may be prepaid with no penalty.; Lets you line up a refinance without paying twice. Ninety days is the common convention and is usually enough; anything shorter is tight.; Also called: Open Period · Open Prepayment · Free Prepayment Window

Reserves & Escrows

Tax and Insurance Escrow: Monthly collection of one-twelfth of annual property taxes and insurance, held by the lender.; Raises your monthly payment and, because it is included in PITIA, directly lowers your qualifying DSCR. A waiver, where available, both frees cash and improves coverage.; Also called: Escrow · T&I Escrow · Impounds · Tax and Insurance Escrow
Replacement / CapEx Reserve: An ongoing monthly deposit for future capital repairs, usually stated per unit per year.; Reduces cash flow every month and counts against your coverage. Waiver authority is often delegated to the lender, so it is negotiable more often than borrowers assume.; Also called: Replacement Reserve · CapEx Reserve · Reserve Deposit · Capital Reserve
TI/LC Reserve: A reserve for tenant improvements and leasing commissions — the cost of building out space and paying brokers when a commercial tenant turns over.; On retail, office, and industrial this is often the largest reserve, and it is sized off the rollover schedule. A large near-term rollover can mean a substantial holdback at closing.; Also called: TI/LC · Tenant Improvement Reserve · Leasing Reserve · TI/LC Reserve
Interest Reserve: Loan proceeds set aside to pay your interest during the period the property produces no income.; It is funded out of your loan, not in addition to it — so it reduces the money available for the actual project, and you pay interest on it. It is not free carry.; Also called: Interest Reserve · Carry Reserve · Debt Service Reserve
Liquidity / Reserve Requirement: Cash you must document and hold, usually expressed as a number of months of payments, often with a seasoning period.; Money you cannot deploy into the next deal. On STR programs it can be twice the long-term rental requirement, which materially changes how many deals you can run.; Also called: Reserves · Liquidity · Post-Closing Liquidity · Cash Reserves

Draws & Construction

Rehab Holdback: The portion of the loan allocated to renovation, retained by the lender and released in draws as work is completed.; This money is not available at closing. You fund each phase of work yourself and get reimbursed afterwards, so you need working capital on top of your down payment. Borrowers who miss this run out of cash mid-project.; Also called: Rehab Holdback · Renovation Escrow · Construction Holdback · Construction Reserve
Draw Schedule and Process: How many draws are permitted, what triggers each, and how long funding takes after a request.; Draw speed determines whether your contractor keeps working. A lender who takes ten days to fund is more expensive than one charging a higher rate who funds in two.; Also called: Draw Schedule · Draw Process · Disbursement Schedule · Progress Draws
Draw and Inspection Fees: Per-draw administrative fees and third-party inspection costs, charged to the borrower.; Individually small and collectively meaningful. Five draws at a $250 fee plus a $175 inspection is over $2,000, which should be in your comparison of two otherwise similar loans.; Also called: Draw Fee · Inspection Fee · Disbursement Fee
Retainage: A percentage withheld from each draw until the project is complete and lien waivers are delivered.; Ten percent retainage on a $78,000 rehab is $7,800 of your money held until the very end — cash you have already paid your contractor.; Also called: Retainage · Holdback Percentage · Retention
Contractor Requirements: Licensing, insurance, references, and contract-form requirements the general contractor must satisfy before closing.; A lender rejecting your contractor after you have a deposit down and a deadline is a common and expensive delay. On larger projects a fixed-price or GMP contract may be mandatory.; Also called: Contractor Approval · GC Requirements · Builder Requirements
Contingency Requirement: A required cushion in the budget for cost overruns, typically a percentage of hard costs.; Consumes loan proceeds you might otherwise use, but a lender-required contingency is usually smaller than the overrun you will actually have.; Also called: Contingency · Budget Contingency · Cost Contingency
Completion Deadline: A deadline for finishing construction — often earlier than loan maturity, and an independent event of default if missed.; You can be in default on a current, performing loan simply because the certificate of occupancy is late. Borrowers watch the maturity date and miss this one.; Also called: Completion Date · Construction Deadline · C of O Deadline

Costs & Process

Good Faith Deposit: Money paid on acceptance of the term sheet, applied against third-party costs.; Usually non-refundable once reports are ordered. The asymmetry is the issue: it protects the lender if you walk, and typically does nothing for you if they decline.; Also called: Good Faith Deposit · Application Fee · Transaction Deposit · Expense Deposit
Third-Party Report Costs: Appraisal, environmental, engineering, feasibility, and property condition reports, ordered by the lender and paid by you.; Non-refundable and paid before you know whether the loan closes. On a portfolio deal requiring an appraisal per property, this runs into five figures.; Also called: Third Party Reports · Appraisal Fee · Environmental · Engineering · PCA
Lender Legal Fees: The cost of the lender's counsel documenting the loan, paid by the borrower.; Frequently uncapped on commercial and portfolio deals — you pay actual, whatever it turns out to be, and you have no control over how much time their lawyer spends.; Also called: Legal Fee · Lender Counsel · Doc Prep Fee · Documentation Fee
Rate Lock: Whether and when the rate can be fixed, for how long, and what an extension costs.; An unlocked rate can move between term sheet and closing, and the term sheet number is often the best case. On agency deals the lock mechanics are a product feature in their own right.; Also called: Rate Lock · Lock Options · Index Lock · Early Rate Lock
Term Sheet Expiration: The date after which the offer lapses.; Sets your negotiating clock. A fourteen-day expiry is a pressure tactic as much as a practical necessity, and shopping the deal properly usually takes longer.; Also called: Expiration · Valid Through · Void After · Acceptance Deadline
Exclusivity Clause: A commitment not to negotiate with other lenders for a stated period after accepting the term sheet.; Removes your leverage exactly when you need it. If the lender re-trades during underwriting, you have no alternative ready.; Also called: Exclusivity · No-Shop · Exclusive Period
Conditions to Closing: Everything that must be delivered or true before the lender will fund.; Where timelines die. A condition like "written evidence that short-term rental use is permitted" or "full permit set issued" can take weeks you have not budgeted.; Also called: Conditions Precedent · Closing Conditions · Conditions to Funding
Estimated Time to Close: How long the lender expects to take from complete submission to funding.; On a purchase with a contractual closing date, speed can be worth more than rate. A cheaper lender who misses your deadline costs you the deal and the earnest money.; Also called: Time to Close · Closing Timeline · Estimated Close
Exit Strategy Requirement: Evidence the lender requires that you can repay — a resale comparable analysis, a refinance pre-qualification, or a signed take-out commitment.; On a short-term loan the lender is underwriting your exit as much as the property. If the exit is a refinance, they may effectively underwrite that loan too.; Also called: Exit Strategy · Takeout · Repayment Source
Insurance Requirements: Coverage the lender requires — property, liability, loss of rents, builder's risk, flood, windstorm — with minimum amounts and endorsements.; In coastal and wildfire markets this has become a major and volatile cost, sometimes large enough to break the coverage test on its own. Builder's risk with vacancy permitted is a specific product many agents get wrong.; Also called: Insurance · Hazard Insurance · Builders Risk · Loss of Rents
Ongoing Reporting Requirements: Financial statements, rent rolls, and progress reports you must deliver after closing, and how often.; Administrative on its face, but late reporting is an event of default in many loan documents, and on facilities it can suspend your ability to draw.; Also called: Reporting · Financial Reporting · Rent Roll Reporting
Property Management Requirements: Whether professional third-party management is required and whether the lender must approve the manager.; A requirement for third-party management adds 6–10% of gross rents as an expense, which can be the difference between clearing the coverage test and failing it.; Also called: Property Management · Management Agreement · Manager Approval