Mortgage Glossaryl
What is Late charge?
Penalty paid by a borrower when a payment is made after the due…
What is Late Payment?
The payment made to the lender after the due date has…
What is Lease-Purchase Mortgage Loan?
An alternative financing option that allows low- and moderate-income home buyers to lease a home with an option to buy. Each month's rent payment consists of principal, interest, taxes and insurance…
What is Lender?
The bank, mortgage company or mortgage broker offering a…
What is Liabilities?
A person's financial obligations. Liabilities include long-term and short-term…
What is LIBOR (London Interbank Offered Rate)?
The interest rate charged among banks for short-term Eurodollar loans, and a common index for…
What is Lien?
A claim by one person on the property of another for payment of a…
What is Life cap (Interest)?
A pre-determined amount that establishes the maximum interest rate life of loan. This can be expressed as a percentage above the start rate or as a rate of interest independent of the start…
What is 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…
What is 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. See…
What is Line of Credit?
An agreement by a commercial bank or other financial institution to extend credit up to a certain amount for a certain…
What is Liquid Asset?
A cash asset or an asset that is easily converted into…
What is Loan?
A sum of borrowed money (principal) that is generally repaid with…
What is Loan administration?
The collection of mortgage payments from borrowers and related responsibilities (such as handling escrows for property tax and insurance, foreclosing on defaulted loans and remitting payments to…
What is Loan application?
A document required by lenders prior to loan approval containing detailed information about the borrower and…
What is Loan application fee?
A fee a prospective buyer pays a lender when applying for a…
What is Loan origination fee?
A fee a lender charges to process a mortgage, usually expressed as a percentage of the loan (or points), which pays for the work in evaluating and processing the…
What is Loan servicing?
See Loan…
What is Loan to value ratio (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 an…
What is Lock or lock-in?
A lender's guarantee of an interest rate for a set period of time, usually between loan application and loan closing. This protects borrowers against rate increases during that…
What is Lock-In Period?
The guarantee of an interest rate for a specified period of time by a lender, including loan term and points, if any, to be paid at closing. Short term locks (under 21 days), are usually available…
What is LTV?
See Loan to Value…
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