late
charge
The penalty a 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.
|
