|
L
Late charge
The penalty borrower
must pay when a payment is made a stated number of days (usually
15) after the due date.
Lease
A written agreement between the property owner and a tenant
that stipulates the conditions under which the tenant may possess
the real estate for a specified period of time and rent.
Leasehold
estate
A way of holding title to a property wherein the mortgagor does
not actually own the property but rather has a recorded long-term
lease on it.
Lease-purchase
mortgage loan
An alternative financing option that allows low- and moderate-income
home buyers to lease a home from a nonprofit organization with
an option to buy. Each month's rent payment consists of principal,
interest, taxes and insurance (PITI) payments on the first mortgage
plus an extra amount that is earmarked for deposit to a savings
account in which money for a downpayment will accumulate.
Legal
description
A property description, recognized by law, that is sufficient
to locate and identify the property without oral testimony.
Liabilities
A person's financial obligations. Liabilities include long-term
and short-term debt, as well as any other amounts that are owed
to others.
Liability
insurance
Insurance coverage that offers protection against claims alleging
that a property owner's negligence or inappropriate action resulted
in bodily injury or property damage to another party.
Lien
A legal claim against a property that must be paid off when the
property is sold.
Lifetime
payment cap
For an adjustable-rate mortgage (ARM), a limit on the amount that
payments can increase or decrease over the life of the mortgage.
See cap.
Lifetime
rate cap
For an adjustable-rate mortgage (ARM), a limit on the amount that
the interest rate can increase or decrease over the life of the
loan. See cap.
Line
of credit
An agreement by a commercial bank or other financial institution
to extend credit up to a certain amount for a certain time to
a specified borrower. See home equity line of credit.
Liquid
asset
A cash asset or an asset that is easily converted into cash.
Loan
A sum of borrowed money (principal) that is generally repaid with
interest.
Loan
commitment
See commitment letter.
Loan
origination
The process by which a mortgage lender brings into existence a
mortgage secured by real property.
Loan-to-value
(LTV) percentage
The relationship between the principal balance of the mortgage
and the appraised value (or sales price if it is lower) of the
property. For example, a $100,000 home with an $80,000 mortgage
has a LTV percentage of 80 percent.
Lock-in
A written agreement in which the lender guarantees a specified
interest rate if a mortgage goes to closing within a set period
of time. The lock-in also usually specifies the number of points
to be paid at closing.
Lock-in
period
The time period during which the lender has guaranteed an interest
rate to a borrower. See lock-in.
Top
of Page
|
