Click on a link below
for an alphabetized list of Real Estate and Mortgage
Terms.
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Lease
A written agreement between the property owner and a
tenant that stipulates the payment and conditions under
which the tenant may possess the real estate for a specified
period of time.
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 option
An alternative financing option that allows home buyers
to lease a home with an option to buy. Each month's
rent payment may consist of not only the rent, but an
additional amount which can be applied toward the down
payment on an already specified price.
Legal description
A property description, recognized by law, that is sufficient
to locate and identify the property without oral testimony.
Lender
A term which can refer to the institution making the
loan or to the individual representing the firm. For
example, loan officers are often referred to as "lenders."
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. It is usually part of a homeowner’s
insurance policy.
Lien
A legal claim against a property that must be paid off
when the property is sold. A mortgage or first trust
deed is considered a lien.
Life cap
For an adjustable-rate mortgage (ARM), a limit on the
amount that the enterest rate can increase or decrease
over the life of the mortgage.
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.
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 officer
Also referred to by a variety of other terms, such as
lender, loan representative, loan "rep," account
executive, and others. The loan officer serves several
functions and has various responsibilities: they solicit
loans, they are the representative of the lending institution,
and they represent the borrower to the lending institution.
Loan origination
How a lender refers to the process of obtaining new
loans.
Loan servicing
After you obtain a loan, the company you make the payments
to is "servicing" your loan. They process
payments, send statements, manage the escrow/impound
account, provide collection efforts on delinquent loans,
ensure that insurance and property taxes are made on
the property, handle pay-offs and assumptions, and provide
a variety of other services.
Loan-to-value (LTV)
The percentage relationship between the amount of the
loan and the appraised value or sales price (whichever
is lower).
Lock-in
An agreement in which the lender guarantees a specified
interest rate for a certain amount of time at a certain
cost.
Lock-in period
The time period during which the lender has guaranteed
an interest rate to a borrower.
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