CRITERIA LOAN APPLICATION BROKERS ABOUT 1ST BRIDGE™ RECENT LOANS HOW DOES A BRIDGE LOAN WORK
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Hard money real estate loans - 1st Bridge
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The following terms are applicable to conventional bank loans as well as to bridge loans and hard money real estate loans. Terms that are specifically relevant to bridge loans or hard money for real estate are noted as such.

Default
Borrower’s breach under the mortgage documents, usually due to failure to make payments on the loan or to pay off. Upon borrower’s default, the default interest specified in the note becomes effective.
Due-on-Sale Provision
A clause in the mortgage documents that requires the borrower to repay the mortgage in full prior to selling the property.
Equity
The difference between the market value of a property and the total balance(s) of the loan(s) and lien(s) encumbering the property. Equity constitutes an owner’s interest in the property, and represents the net amount of cash an owner would receive if the property were sold at present. Saying that a property has “plenty of equity” is tantamount to saying that the ratio between a loan and a property value is low (see LTV).
Earnest Money
A cash deposit made by a buyer as a show of seriousness about purchasing a property. An earnest money deposit is usually held in escrow by a seller’s attorney and could be forfeited if the buyer fails to purchase the property as agreed.
Escrow
Money held in trust by a third party such as an attorney or a title company. The funds are held until the payer of the escrow performs as agreed. Escrow funds can also be held by a lender for payment of insurance, taxes, repairs, etc. A holder of escrow moneys by definition has no rights to the moneys.
FICO Score
First Mortgage
A senior lien on a property (as opposed to a second mortgage). Even though a first mortgage is a senior lien it is still junior to taxes.
Foreclosure
The process a lender starts subsequent to default or maturity. If a property is not sold or refinanced during foreclosure, the process will culminate in a foreclosure sale of the property. During foreclosure the default interest specified in the mortgage documents is in effect.
Guarantee
Hard Money
We use the term Hard Money as a synonym for a bridge loan. Borrowers obtain hard money for real estate properties that are not easily bankable or when their properties are in financial distress, or if they simply need the money fast. For more information, see hard money real estate loans .
Hard Money Real Estate Loans
Hard Money for real estate situations that are difficult, e.g., urgent need for financing, poor credit, distressed properties, etc. Hard money real estate loans encompass rehab loans, foreclosure bailouts, property debt consolidation loans, various bad credit mortgages, and more. Hard money real estate loans are also used when both the property and the borrower’s credit are in good shape but there is not enough time to close with a conventional bank.