Mortgage Dictionary for words that start with letter L
Land - In a legal sense, the solid part of the surface of the earth, as distinguished from water; any ground, soil or earth whatsoever regarded as the subject of ownership and everything annexed to it, whether by nature, e.g., trees and everything in or on it, such as minerals and running water, or annexed to it by man; e.g., buildings, fences, etc. In an economic sense, land consists of all those elements in the wealth of a nation which is supposed to be furnished by nature as distinguished from those
Land Contract - Installment plan for buying a house. It is used as an alternative to obtaining a loan from a traditional, source such as a mortgage banker or savings and loan.
Late Charge - A penalty for failure to pay an installment on time.
Latent Defect - Hidden structural defect.
Lease with Option to Purchase - A lease under which the lessee has the right to purchase the property. The option may run for the length of the lease or only for a portion of the lease period.
Legal Description - An expanded and unique description of a property that is used on legal documents, such as deeds and deeds of trust. Recorded documents generally require a legal description.
Lender - A general term encompassing all mortgages, and beneficiaries under deeds of trust.
Lender's Instructions - A document that lenders prepare for the closing agent that outlines the requirements for loan closing.
Lessee - One who possesses the right to use or occupy a property under lease agreement.
Lessor - One who holds title to and conveys the right to use and occupy a property under lease agreement.
Letter of Intent - A formal method of stating that a prospective developer, buyer or lessee is interested in property.
Lien - An encumbrance against property for the payment of debt; a lien may be a mechanic's lien, mortgage, unpaid taxes or judgment.
lien - An encumbrance against property for money due, either voluntary or involuntary.
Life Estate - An estate in real property for the life of a living person. The estate then reverts back to the grantor or to a third party.
lifetime cap - A provision of an ARM that limits the highest rate that can occur over the life of the loan.
Limited Partnership - A partnership consisting of one or more general partners who conduct the business and are responsible for losses, and one or more special partners, who contributes capital and are liable only to the amount contributed.
Lis Pen dens - A public notice that litigation is pending on a property.
Listing - A record of property for sale by a broker who has been authorized by the owner to sell. Also used to denote the property so listed.
Listing Agreement - Agreement between a property owner and a real estate broker, authorizing the broker to find a buyer for the property. If the sale is consummated, the listing broker will be paid a fee.
Loan Discount/Premium Fees - Fees that borrowers pay (sometimes seller will pay for borrower) that adjust to the yield requirement of the investor. Loan discount denotes an investor yield requirement higher than the note rate. Loan premium denotes an investor yield requirement lower than the note rate.
Loan Lock - Guarantee from a lender that a borrower will receive the interest rate in effect at the time of loan application.
Loan Officer - A person that helps borrowers through the loan selection, processing, and closing of a mortgage loan. Loan officers can be paid a commission or salary for their services and can work for mortgage brokers, mortgage bankers, or depository institutions.
Loan Origination Fees - The cost to obtain a loan that is paid to the originating lender or broker.
Loan Package - The information regarding a borrower and property necessary which is the basis for a lender's credit decision to extend or deny credit.
Loan Ratio - The amount of a loan to the value or selling price of real property.
Loan Servicing - The function of collecting loan payments, managing the property tax and insurance escrows, foreclosing on defaulted loans and remitting payments to the investor/beneficiary.
loan to value ratio (LTV) - The ratio of the amount of your loan to the appraised value of the home. The LTV will affect programs available to the borrower and generally, the lower the LTV the more favorable the terms of the programs offered by lenders.
Loan-to-Value Ratio - The ratio of the mortgage loan amount to the property's appraised value or selling price, whichever is less.
lock-in - A written agreement guaranteeing the home buyer a specified interest rate provided the loan is closed within a set period of time. The lock-in also usually specifies the number of points to be paid at closing.
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Mortgagor and Mortgagee -
Mortgagor is also called the borrower or owner, while Mortgagee is also called the lender.
Face Value -
The borrower promises to the pay the original principal amount which is the face value of the mortgage.
First mortgage and Second mortgage -
The first mortgage refers to the current mortgage, while the second mortgage refers to the additional mortgage.
Fair Market Value -
It is the median price between the highest price acceptable to buyer and lowest price acceptable to seller.
Market Value -
It is the most likely price at which the property would sell.