Title Insurance Dictionary-Glossary

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L

Land Contract
See CONTRACT FOR DEED.

Late Charge
An additional charge a borrower is required to pay as penalty for failure to pay a regular installment when due.

Lease Hold Estate
Tenants right of possession for a specific period of time under a lease agreement. (Common in Hawaii.)

Lender
A financial institution, like a bank, that loans you money to buy a home, and expects you to pay the money back to them in a stated period of time, usually with interest.

Letter of Credit
A letter authorizing a person or company to draw on a bank or stating that the bank will honor their credit up to the stated amount.

Lien
A claim upon a piece of property for the payment or satisfaction of a debt or obligation. Property is said to be encumbered by a lien and the lien must be removed to clear title.

Life Cap
With regard to an adjustable rate mortgage, a ceiling the note rate cannot exceed over the life of the loan.

Life Estate
The right to use, occupy, and own for the life of an individual. Compare, FEE SIMPLE.

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.

Liquidity
Cash position based upon assets that can readily be converted to cash.

Lis Pendens
Recorded document showing a pending litigation filed in the court. These show up on the preliminary title report and must be dealt with when transferring ownership or refinancing.

Loan Application
The loan application is the source of information on which the lender bases a decision to make the loan; defines the term of the loan, gives the name(s) of the borrower(s) , place of employment, salary, bank accounts and credit references, and describes the real estate that is to be mortgaged. It also stipulates the amount of the loan being applied for and the repayment terms.

Loan Fee
The charge made for negotiating a loan, in addition to interest; sometimes used in reference to an additional fee paid directly to a lender either for a commitment or at the time advances are made.

Loan Guaranty Certificate
VA document stating that portion of a loan that is guaranteed.

Loan Term
The total amount of time you are given by a lender to pay off your home loan. Loan terms vary, but are generally set at 15 or 30 years.

Loan-to-Value Ratio (LTV)
The relationship between the amount of the mortgage loan and the appraised value of the property expressed as a percentage.

Lock-in-Period
That portion of the term of a mortgage loan during which the loan cannot be prepaid.

Loss Mitigation
Mortgagees attempt to devise a delinquency resolution without having to resort to lengthy and expensive litigation (foreclosure). Loss Mitigation methods include: Creative Forbearance Plans, Pre-Foreclosure Short Sales, Deed-in-Lieu of Foreclosure, Deferments, Modifications, Refinances.

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