Top 25 Financing Terms Every Home Improvement Sales Pro Must Know

These vocabulary flashcards cover the Top 25 financing terms and Improvifi use cases from the lecture notes to prepare for the sales pro exam.

Soft Credit Pull

A credit check that does not impact the homeowner’s score; used by Improvifi to show homeowners what they qualify for without risk.

Hard Credit Pull

A full credit check that can slightly affect the credit score, usually required for final approval before funding.

FICO Score

A number between $300$–$850$ that represents a person’s credit health and dictates which lender bands (super-prime, prime, near-prime, or subprime) they fall into.

Debt-to-Income Ratio (DTI)

The percentage of a homeowner's monthly income that is already dedicated to debt payments.

Pre-Approval

An instant, non-final "green light" delivered via the Improvifi App after a soft pull to show potential qualifying amounts.

Conditional Approval

An approval that requires further documentation or a hard pull to finalize, common for secured loans like HELOCs.

Unsecured Loan

A loan not tied to property collateral, often used for kitchen table sales with quick approvals up to $\$100,000$.

Secured Loan

A loan backed by the home, typically involving lower rates and more documentation; available through Purple Apple Loans for projects between $\$15,000$ and $\$400,000$.

HELOC (Home Equity Line of Credit)

A revolving credit line against home equity, functioning similarly to a credit card for large or ongoing remodels.

Same-as-Cash Loan

A loan program where no interest is charged if the balance is paid within a promotional period, such as $12$-$18$ months.

Deferred Payment Loan

A loan where payments do not begin for a set timeframe, typically $90$-$180$ days, helping overcome timing objections like waiting for a tax refund.

Fixed Rate Loan

A loan where the interest rate and payment amount remain constant for the entire life of the loan.

Variable Rate Loan

A loan where the interest rate can move up or down; Improvifi generally steers homeowners toward fixed rates to avoid confusion.

Progress Payment Loan

A loan that releases funds in stages or milestones as big-ticket, multi-phase projects like roofing and siding advance.

Monthly Payment Factor

A quick formula used to estimate monthly payments per $\$1,000$ borrowed (e.g., $\$10$ per $\$1,000$).

APR (Annual Percentage Rate)

The total yearly cost of borrowing, which includes both interest and any applicable fees.

Dealer Fee

A fee paid by the contractor to the lender to access specific loan programs; Improvifi emphasizes offering many "no dealer fee" programs.

Promotional Rate

A special low or $0\%$ interest rate offered for a limited time to encourage homeowners to commit to a project quickly.

No Prepayment Penalty

A loan feature that allows homeowners to pay off their balance early without incurring additional fees.

Waterfall Lending

A lending strategy that starts with top-tier lenders and flows down through different credit bands (super-prime to subprime) to ensure more approvals.

Good-Better-Best

A sales presentation technique showing three options: cash price, a promotional loan, and a long-term low-payment option.

Objection Handling

The process of addressing homeowner concerns such as being "too pushy" or needing to "talk to a spouse" using specific frameworks.

Close Rate

The percentage of sales presentations that result in signed deals; leading with financing can increase this by $2$-$3$ times.

Funding Timeline

The duration until a contractor is paid; unsecured lenders usually fund instantly, while secured lenders take $5$-$7$ days.

Consumer Credit Center

The identity of Improvifi, positioning the contractor as a "one-stop shop" for financing instead of sending homeowners to banks.