L

Late charge
The penalty a borrower must pay when a payment is made a stated number of days. On a first trust deed or mortgage, this is usually fifteen days.

Lease
A written agreement between the property owner and a tenant that stipulates the payment and conditions under which the tenant may possess the real estate for a specified period of time.

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 option
An alternative financing option that allows home buyers to lease a home with an option to buy. Each month's rent payment may consist of not only the rent, but an additional amount which can be applied toward the down payment on an already specified price.

Legal description
A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.

Lender
A term which can refer to the institution making the loan or to the individual representing the firm. For example, loan officers are often referred to as "lenders."

Lender Programs
For years the government has understood that unless we can bring in 1st Time Buyers to the real estate market, the entire market will fail. In fact, 1st Time Buyers have made up about 40% of all buyers throughout the country. After all, if you a are a home seller selling a moderately low priced home, most of the home buyers who will want your home will be 1st Time Buyers. If you take those buyers out of the market, who will buy the lower priced homes so that those sellers can buy their second or third homes? Not only are there Government Programs designed to help this vital part of the market, the CRA has given great incentives to banks and lenders to create their own programs. These programs include 100% Financing, Lender Rebates, easier qualifying loans, and lower interest rate programs.

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. It is usually part of a homeowner’s insurance policy.

Lien
A legal claim against a property that must be paid off when the property is sold. A mortgage or first trust deed is considered a lien.

Life cap
For an adjustable-rate mortgage (ARM), a limit on the amount that the enterest rate 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.

Listing Agent
Many real estate agents prefer to work with home sellers rather than home buyers. These agents are commonly known as Listing Agents.

Loan
A sum of borrowed money (principal) that is generally repaid with interest.

Loan officer
Also referred to by a variety of other terms, such as lender, loan representative, loan "rep," account executive, and others. The loan officer serves several functions and has various responsibilities: they solicit loans, they are the representative of the lending institution, and they represent the borrower to the lending institution.

Loan origination
How a lender refers to the process of obtaining new loans.

Loan servicing
After you obtain a loan, the company you make the payments to is "servicing" your loan. They process payments, send statements, manage the escrow/impound account, provide collection efforts on delinquent loans, ensure that insurance and property taxes are made on the property, handle pay-offs and assumptions, and provide a variety of other services.

Loan-to-value (LTV)
The percentage relationship between the amount of the loan and the appraised value or sales price (whichever is lower).

Lock Box
A small box locked on the doorknob or other secure fixture on a seller’s house which contains the key to the seller’s home. A real estate agent will be able to access the key inside in order to show the seller’s home while they are away.

Lock-in
An agreement in which the lender guarantees a specified interest rate for a certain amount of time at a certain cost.

Lock-in period
The time period during which the lender has guaranteed an interest rate to a borrower.

Low Income Borrower
A Low Income Borrower is a borrower who has a family income of less than 80% of the median income for other families in the area. There many Government Programs and Lender Programs designed to help Low Income Borrowers and Moderate Income Borrowers qualify for a home loan.