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GLOSSARY OF MORTGAGE TERMS:
Page 1 of 2 | 19 terms beginning with 'L' 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. Legal description A property description, recognized by law that is sufficient to locate and identify the property without oral testimony. Lender An institution that makes loans to borrowers on real estate. 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 when the property is sold. Lifetime Cap A provision of an ARM that limits the total increase in interest rates over the life of the loan. 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. 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 Commitment Formal offer by a lender stating the terms under which it agrees to loan money to a homebuyer. Loan origination The process by which a mortgage lender brings into existence a mortgage secured by real property. |