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Glossary of
FinanciaI & Real Estate Terms

Index of Terms | Complete List of Terms

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Late Charge : The additional charges paid by a borrower as a penalty, due to a late payment.

Late Payment : A payment made after the due date which is made in a credit contract due to which additional charges will be imposed.

Lease: : A written agreement between a 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 : An estate for a fixed length of time, established when a landlord gives up possession of real estate to a tenant, giving the tenant an equitable interest in the property, as defined by lease terms.

Lease Option : A rental agreement indicating a tenant's option to purchase a property. Monthly payments consists not only of rent, but an overage that can be applied towards a down payment on an already established amount.

Lessor : The persona or organization who regularly leases, offers to lease, or arranges for the lease of the item.

Lender : It can be an individual, the bank, any financial institution or mortgage broker offering the loan.

Lender Fees : This is the amount of money a debtor has to pay a lender as fees.

Lender Processing Fee : This fee is given for an analysis of your loan application along with the compilation of the necessary supporting documentation to close the loan.

Liability : Legal responsibility to repay debt. Also, sometimes credit card companies may state that they are not responsible or liable if your card is misplaced, which means that they are not liable.

Liability on an Account : The total legal obligation to repay debt.

Lien : The right to take another's property if an obligation is not discharged.

Life of Loan Cap (Lifetime Cap) : The maximum interest rate that can be charged during the life of the loan. This value is often expressed as an increment above the initial loan rate. For example, an adjustable rate loan with an initial rate of 7.25% and a 6% lifetime cap will never adjust above a rate of 13.25% (7.25+6.0).

Liquidation : The process of sale of a debtor s property and assets for cash to help repay creditors. Also, when a business/company is terminated or made bankrupt, all company assets are sold off and the proceeds go to pay the creditors. Any remaining money is distributed between the shareholders.

Liquidated Debt : Undisputed debt.

Loan : The principal, or total amount of money borrowed, that is to be repaid to the lender with interest.

Loan Amount : The amount of money borrowed from a person, company or financial institution. For example, in real estate, subtracting the down payment from the purchase price of the home will provide you with the loan amount.

Loan Application : An initial statement of personal and financial information required to apply for a loan.

Loan Application Fee : The lender charges this fee for the costs incurred due to the processing of loan application. This also covers the cost of obtaining a credit report, a property appraisal and the closing costs of a loan.

Loan Consolidation : The consolidation of multiple loans into one loan amount.

Loan Officer : An intermediary between borrowers and lending institutions. A loan officer solicit loans, represent creditors to borrowers, and represent borrowers to creditors.

Loan Origination : What the process of obtaining a new loan is called.

Loan Origination Fee : The fees a lender charges from a borrower to meet the administrative costs while a loan is being processed.

Loan Servicing : A service performed by a lender to protect their interest or a mortgage investment, including collecting monthly payments from borrowers and dealing with delinquencies.

Loan Term : The time span between the closing date of the loan and the date of your last payment.

Loan-To-Value Ratio (LTV Ratio ) : The relationship between the amount of the mortgage loan and the appraised value of the property expressed as a percentage. A LTV ratio of 80 means that a borrower is borrowing 80% of the value of the property and paying 20% as a down payment. For purchases, the value of the property is assumed to be the purchase price, for refinances the value is determined by an appraisal.

Lock or Lock-In : A lender's guarantee of an interest rate for a set period of time, usually between loan application approval and loan closing. The lock-in protects against increased rate during that time.

Lock Noun : The period, expressed in days, during which a lender will guarantee a rate. Some lenders will lock rates at the time of application while others will allow the borrower to lock the rate after the application is taken.

Lock Verb : The act of committing to a mortgage rate. This action, taken by a borrower some time between the application and the closing dates, is sometimes accompanied by a payment by the borrower to the lender.

Lock-in Clause : Clause in a loan agreement that states that the borrower cannot repay a loan prior to a specified date.

Long-Term Debt : Loans and financial obligations lasting over one year.


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Index of Terms | Complete List of Terms


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