Program details last reviewed October 10, 2026 · Questions? Call (949) 779-5804
- DSCR (Debt-Service Coverage Ratio)
- Gross monthly rent divided by the full monthly payment: principal, interest, taxes, insurance and any association dues. At 1.0 the rent exactly covers the payment. A DSCR loan qualifies the property on that ratio, so your personal income and tax returns stay out of it.
- Non-QM Loan
- A mortgage underwritten outside the standard "qualified mortgage" rules built around tax returns. DSCR, P&L-only, bank-statement and hard money loans are all non-QM. It isn't another word for subprime; the income is simply documented a different way.
- LTV (Loan-to-Value)
- The loan as a percentage of the property's value. $800,000 borrowed against a $1,000,000 property is 80% LTV. A lower LTV means more of your own equity in the deal and less risk for the lender.
- CLTV (Combined Loan-to-Value)
- Every loan on the property added together, divided by its value. It's the number that matters when a HELOC goes behind an existing first mortgage. The HELOC here goes to 90% CLTV, or 80% in Texas by state law.
- Points
- A fee paid at closing, where one point equals 1% of the loan amount. Programs trade points against other terms. A hard money purchase at 10% down with a 700+ FICO, for example, carries 3.5 points.
- Hard Money Loan
- Short-term, asset-based financing underwritten mainly on the property and the equity in it rather than on your income. Investors use it for flips, bridges, fast closings, and files a bank can't make sense of.
- P&L-Only Loan
- A non-QM program where one profit-and-loss statement, prepared by a CPA or licensed tax preparer (self-prepared options exist), is the whole income file. No tax returns, no bank statements and no deposit reviews, and no self-employment requirement. It's also sold as a no-ratio or no-income-verification loan; here those are the same program on the same terms, from 640 FICO and $150,000.
- No-Ratio / No-Income-Verification Loan
- Industry names for a mortgage where no debt-to-income ratio is worked out from tax returns, pay stubs or W-2s. Here it's the P&L-only loan under another name: the P&L stands in for the income file and no bank statements are collected. It's available on a home you live in, for a purchase or a refinance, and on investment property.
- Bank-Statement Loan
- A non-QM program that works out income from 12 to 24 months of bank deposits instead of tax returns. It's a close cousin of the P&L-only loan for self-employed borrowers, with credit from 620 in first position.
- HELOC (Home Equity Line of Credit)
- A revolving line of credit secured by your home's equity, sitting behind the first mortgage you already have. You draw what you need and pay interest on what you use. The one I offer can fund in as little as 5 business days with no appraisal appointment.
- HEA (Home Equity Agreement)
- Not a loan. An investor pays you cash today for a share of the home's future value. There are no monthly payments and no interest, and it settles when you sell, refinance or buy it out. Credit is accepted from the 500s, on amounts from $50,000 to $600,000.
- Cash-Out Refinance
- Replacing your current mortgage with a larger one and taking the difference in cash. It resets the rate on the whole balance, which helps or hurts depending on how today's rates compare with the one you have.
- Seasoning
- How long you have to own a property, or hold its mortgage, before a lender will use today's value or allow a refinance. The HELOC has no title seasoning, so someone just added to title can still qualify. DSCR cash-out has none on loans of $100,000 or more and uses the new appraised value right after a purchase or rehab; under $100,000, six months applies.
- Soft Pull vs. Hard Pull
- A soft credit inquiry shows your scores without affecting them, and it's all that's needed to see your options here. A hard pull comes later, with your permission, at full application.
- AVM (Automated Valuation Model)
- A data-driven estimate of a property's value, used in place of an appraiser's visit. It's one reason the HELOC can fund in days rather than weeks, on lines up to $1,000,000.
- DTI (Debt-to-Income Ratio)
- Monthly debt payments divided by gross monthly income. Conventional, FHA and VA underwriting turn on it; DSCR and P&L-only programs are built not to use it.
- PMI (Private Mortgage Insurance)
- Insurance that protects the lender on a conventional loan above 80% LTV. It comes off once you reach 20% equity, which is an advantage over FHA, whose mortgage insurance generally stays for the life of the loan.
- IRRRL (VA Interest Rate Reduction Refinance Loan)
- The VA's streamline refinance. It lowers the rate on an existing VA loan with no cash out, no appraisal and no income documents. It stays available in Texas, where a VA cash-out isn't.
- Prepayment Penalty
- A fee for paying a loan off early. It's common on DSCR and other investor loans and can usually be traded against the rate. Ask how a program's prepayment terms fit your plan to sell or refinance.
- Bridge Loan
- Short-term financing that carries you to a sale or a long-term refinance: buy now, sell or refinance later. Hard money is the usual vehicle.
- Portfolio / Wholesale Lender
- A wholesale lender funds loans that brokers and loan officers bring to it. A portfolio lender keeps its loans on its own books and can set its own rules. Access to both is how one scenario gets priced more than one way.
- 1031 Exchange
- An IRS provision that lets an investor defer capital-gains tax by rolling sale proceeds into a like-kind property on a strict timeline. DSCR loans are a common way to finance the replacement property, and exchange proceeds can be the down payment.
- Reverse 1031 Exchange
- A 1031 exchange in the opposite order: the replacement property is bought first and the old one sold afterward, through an exchange accommodation titleholder. The financing has to move quickly, which is why DSCR loans, with no income documents, often fit. Both standard and reverse exchanges are supported.
- Land Contract (Contract for Deed)
- Seller financing where the buyer pays in installments and receives the deed only when the contract is paid off. Investors often refinance out of one into DSCR financing to take title and lock in long-term terms. Six months of seasoning applies.
- Probate / Heir Buyout
- Paying off the other heirs to keep an inherited property. Because you already hold an ownership interest, it's treated as a refinance rather than a purchase: the property's equity funds the buyout, and on a rental the rent can qualify it through DSCR.
- STR / LTR (Short-Term / Long-Term Rental)
- STR means nightly or weekly rentals such as Airbnb and Vrbo. LTR means a traditional lease. The rental programs here finance both, and market rent can do the qualifying.
- Owner-Occupied vs. Investment Property
- Owner-occupied means you live there or will. Investment means it's held for income. The difference decides which programs apply, the minimum down payment (20% on most investment purchases), and which state rules govern the loan.
- Second Lien / Second Mortgage
- Any loan recorded behind your first mortgage. A HELOC is the most common. The first lien is paid first in a payoff, which is why second-lien terms are set by combined LTV.
- Texas Homestead Rule (Art. XVI §50(a)(6))
- The Texas constitutional provision that caps home-equity lending at 80% combined LTV and requires a 12-day waiting period before closing. It's also why VA and FHA cash-out refinances aren't available on a Texas homestead.
- Reverse Mortgage / HECM
- A loan that turns equity in the home you live in into cash with no monthly mortgage payment. It's repaid when the home is sold or you move out. The federally insured HECM starts at age 62, the current mortgage balance needs to be under about half the home's value, and loan amounts go up to $4,000,000.
- FICO Score
- The credit-score model most mortgage lenders use. Minimums here: 620 for a HELOC (a hard floor), for conventional, and for FHA purchases and cash-out; 640 for a P&L-only loan, or 680 for a P&L HELOC in second position. Hard money purchase terms tier at 700: 10% down with 3.5 points at or above it, 15% down below.
- Escrow / Impounds
- The account your servicer uses to collect and pay property taxes and insurance along with the mortgage payment. DSCR underwriting counts taxes and insurance in the coverage ratio.