Glossary

LATE CHARGE: An added charge, or penalty added to a regular mortgage payment when the payment is made late by an amount of time specified in the original loan documents.

LATENT DEFECTS: Any and all defects in a piece of property which is not readily apparent, but which has an impact of the value. Actual structural damage or termite infestation would be examples of latent defects.

LEASE: This is a written contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force.

LEASEHOLD ESTATE: This is a type of property ''ownership'' where the buyer actually has a long-term lease on the property.

LEASE OPTION: This is a type of lease agreement that gives the tenant an option to buy the property. Usually, a portion of the regular monthly rent payment will be applied towards the down payment.

LEGAL DESCRIPTION: The physical description of a piece of property, identifying its specific location in terms established by the municipality in which the property resides. Often, this is related to specific distances from a known landmark or intersection.

LENDER: This can be a person or entity who loans funds to a buyer. In return for the loan, the lender will receive periodic payments, including principal and interest amounts.

LIABILITIES: This is considered a person's outstanding debt obligations.

LIABILITY INSURANCE: Insurance that covers against potential lawsuit brought against a property owner for alleged negligence resulting in physical or other type damage to another party.

LIEN: This is any claim against a piece of property resulting from a debt or other obligation.

LIFE CAP: The actual limit on how far the interest rate can move for an Adjustable Rate Mortgage.

LIKE-KIND PROPERTY: This is any property which is substantially similar to another property.

LINE OF CREDIT: When a lender extends credit for a certain amount for a specific amount of time. This can be used by the borrower at his discretion.

LIQUID ASSET: This is considered any asset which can be quickly converted into cash at little or no cost, or cash itself.

LOAN: This is money borrowed, to be repaid with interest, according to the specific terms and conditions a loan.

LOAN OFFICER: This is a person that "sells" loans, representing the lender to the borrower, and the borrower to the lender.

LOAN ORIGINATION: This is how a lender refers to the process of writing new loans.

LOAN SERVICING: Typically this is carried out by the company you make payments to. They process the payments, mailing of monthly statements, management and disbursement of escrow funds, etc.

LOAN-TO-VALUE RATIO (LTV): The lender compares the amount owed on a mortgaged property to its fair market value.

LOCK-IN: This is an agreement between a lender and a borrower, guaranteeing an interest rate for a loan if the loan is closed within a certain amount of time.

LOCK-IN PERIOD: It is the amount of time the lender has guaranteed an interest rate to a borrower. The borrower sometimes pays a fee for this.