Understand the most important lending and mortgage terms. Mortgages can be confusing for the first time home buyer, so let us help explain. Below you'll find explanations for most of the mortgage industry terms.

What is Late charge? Penalty paid by a borrower when a payment is made after the due…
Written by Henry Gilbert
What is Late Payment? The payment made to the lender after the due date has…
Written by Henry Gilbert
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…
Written by Henry Gilbert
What is Lender? The bank, mortgage company or mortgage broker offering a…
Written by Henry Gilbert
What is Liabilities? A person's financial obligations. Liabilities include long-term and short-term…
Written by Henry Gilbert
What is LIBOR (London Interbank Offered Rate)? The interest rate charged among banks for short-term Eurodollar loans, and a common index for…
Written by Henry Gilbert
What is Lien? A claim by one person on the property of another for payment of a…
Written by Henry Gilbert
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…
Written by Henry Gilbert
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…
Written by Henry Gilbert
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…
Written by Henry Gilbert
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…
Written by Henry Gilbert
What is Liquid Asset? A cash asset or an asset that is easily converted into…
Written by Henry Gilbert
What is Loan? A sum of borrowed money (principal) that is generally repaid with…
Written by Henry Gilbert
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…
Written by Henry Gilbert
What is Loan application? A document required by lenders prior to loan approval containing detailed information about the borrower and…
Written by Henry Gilbert
What is Loan application fee? A fee a prospective buyer pays a lender when applying for a…
Written by Henry Gilbert
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…
Written by Henry Gilbert
What is Loan servicing? See Loan…
Written by Henry Gilbert
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…
Written by Henry Gilbert
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…
Written by Henry Gilbert
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…
Written by Henry Gilbert
What is LTV? See Loan to Value…
Written by Henry Gilbert


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