Private Lending Glossary
Plain-English definitions of the most common terms you will hear when working with a private real estate lender in South Texas.
Asset-Based Lending
A loan decision driven primarily by the value and quality of the collateral (the property) rather than the borrower's tax returns or W-2 income.
ARV (After Repair Value)
Estimated value of a property after planned repairs or renovations are completed. Global Fox Financial does not lend on construction or rehab projects, but ARV is commonly referenced in real estate.
Balloon Payment
A large lump-sum payment due at the end of a short-term loan after a series of smaller monthly payments.
Bridge Loan
Short-term financing used to bridge the gap between purchasing a new property and securing long-term financing or selling another property.
Cash-Out Refinance
Replacing an existing loan with a new, larger loan and taking the difference in cash, using the property's equity as collateral.
Closing Costs
Fees paid at the closing of a real estate transaction, typically including title, escrow, recording, lender, and legal fees.
Collateral
The asset (typically real estate) pledged to secure a loan. If the borrower defaults, the lender can take ownership of the collateral.
Commercial Loan
A loan secured by income-producing or business-use real estate such as multifamily, retail, office, industrial, or mixed-use property.
Equity
The portion of a property's value the owner actually owns — market value minus what is still owed on existing loans.
Escrow
A neutral third party that holds funds and documents during a real estate transaction until all closing conditions are met.
First Lien
The senior loan position on a property. The first lien holder is paid first if the property is sold or foreclosed.
Foreign National Loan
Real estate financing for borrowers who are not U.S. citizens or permanent residents and may not have a U.S. credit history.
Hard Money Loan
Short-term, asset-based real estate financing funded by private lenders rather than banks. Approval focuses on the property.
Hidalgo County
County in South Texas including McAllen, Edinburg, Mission, Pharr, and Weslaco — a primary lending area for Global Fox Financial.
Interest-Only Payment
A monthly payment that covers only the interest on a loan; the principal balance does not decrease.
Lien
A legal claim recorded against a property to secure repayment of a debt.
Loan-to-Value (LTV)
The loan amount divided by the property's appraised value, expressed as a percentage. Lower LTV usually means better terms.
Maturity Date
The date the full unpaid balance of a loan is due.
Origination Fee
A one-time fee paid to the lender for processing a new loan, often expressed as a percentage of the loan amount (points).
Owner-Occupied
A property where the borrower lives as their primary residence. Most private lending focuses on non-owner-occupied investment property.
Points
Upfront fees expressed as a percentage of the loan amount. One point equals 1% of the loan.
Prepayment Penalty
A fee charged if a borrower pays off a loan before a certain date.
Private Lender
A non-bank lender that funds loans directly, often with faster decisions and more flexible underwriting than traditional banks.
Promissory Note
The legal document in which the borrower promises to repay the loan under specific terms.
Refinance
Replacing an existing loan with a new one — typically to lower the rate, change the term, or pull cash out of equity.
Second Lien
A loan recorded behind a first lien. Paid only after the first lien is satisfied if the property is sold or foreclosed.
Seasoning
The length of time funds have been in an account or that a borrower has owned a property. Global Fox Financial does not require down payments to be seasoned.
Self-Employed Borrower
A borrower whose income comes from a business they own rather than a W-2 job. Often better served by asset-based, equity-driven underwriting.
Term
The length of time a loan has to be repaid in full.
Title Insurance
A policy that protects the lender (and optionally the buyer) against losses from defects in the property's title.
Underwriting
The process a lender uses to evaluate the risk of a loan — looking at the property, the borrower, and the exit strategy.
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