Mortgage Glossary
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Late Charge
The penalty a borrower must pay when a payment is made a stated number of days (usually 20) 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 down payment will accumulate.
Legal Description
A property description, acceptable by real estate law, that is sufficient to locate and identify the property without oral testimony.
Lender's Attorney's Fees
Fees paid by a lender for legal services and/or advice in conjunction with providing a mortgage loan. These fees may be charged to the borrower.
Lender Fee
Fees that are kept by the lender to cover some of their expenses and to meet their profitability goals. Common lender fees charged is underwriting, flood cert. fee, document prep. fee, and tax service fee. The lender may have one (lender) fee to cover most or all the above fees. 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. Line Of Credit
An agreement by a bank or financial institution to extend credit up to a specific amount for a certain period of 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.
Listing Agent
The real estate agent employed by the seller to find a buyer.
Loan
A sum of borrowed money (principal) that is generally repaid with interest.
Loan Application
This document, completed by the applicant, contains information about the type of mortgage being applied for and personal financial situation of the applicant.
Loan Application Fee
A fee charged by a lender, mortgage broker or mortgage banker to an applicant when a loan application is submitted. At Inter-lake-lending.com we consider application fee a
"junk fee". Loan Closing
A meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and paying closing costs. Also called "settlement".
Loan Flipping
Inducing a borrower to refinance a loan repeatedly in order to charge high points and fees each time the loan is refinanced. See also Predatory Lending.
Loan Origination
The process by which a mortgage lender brings into existence a mortgage secured by real property.
Loan Program
A description of the loan features including whether the interest rate changes and how long the loan will last.
Loan Settlement
See closing. Loan-To-Value (LTV)
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 closes within a set period of time. The lock-in also usually specifies the number of points to be paid at closing. See rate lock.
Lock-In Period
The time period during which the lender has guaranteed an interest rate to a borrower. Standard lock-in period is 30 days, others are 7, 10, 20, 45, 60 days. | 
