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| • | Late Charge - The penalty a borrower must pay when a payment is made a stated number of days (usually 15) after the due date. |
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| • | Late Payment - A payment made later than agreed upon in a credit contract and on which additional charges may be imposed. |
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| • | Lease - A written agreement between the property owner and a tenant that stipulates the conditions under which the tenant may possess the real estate for a specified period of time and rent. |
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| • | 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. |
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| • | Legal Description - A property description, recognized by law that is sufficient to locate and identify the property without oral testimony. |
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| • | Lender - Company that performs the functions necessary to complete a mortgage transaction. Lenders include approved sellers, mortgage brokers, and third-party originators (TPOs). |
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| • | Lender Fees - These are items payable in connection with the loan and contribute to the total amount of the loan's closing costs. These are the fees that lenders charge to process, approve and make the mortgage loan. See Closing Costs for more information. |
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| • | Lessee - A person who signs a lease to get temporary use of property. |
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| • | Lessor - A company that provides temporary use of property usually in return for periodic payment. |
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| • | 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. |
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| • | 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. |
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| • | Liability on an Account - Legal responsibility to repay debt. |
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| • | Lien - A claim upon a piece of property for the payment or satisfaction of a debt or obligation. |
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| • | Lifetime Cap - A provision of an ARM that limits the total increase in interest rates over the life of the loan. |
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| • | 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 mortgage. |
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| • | 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. |
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| • | Liquid Asset - A cash asset or an asset that is easily converted into cash. |
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| • | Loan - A sum of borrowed money (principal) that is generally repaid with interest. |
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| • | Loan Amount - The amount of debt not including interest. |
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| • | Loan Commitment - Formal offer by a lender stating the terms under which it agrees to loan money to a homebuyer. |
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| • | Loan Origination - The process by which a mortgage lender brings into existence a mortgage secured by real property. |
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| • | Loan Program - Defines the scope of your mortgage, including the type of interest rate you have and the mortgage term. For example, your loan program may be for 30 years with a fixed rate or may be for 5 years with an adjustable rate. |
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| • | Loan Servicing - The collection of mortgage payments from borrowers and related responsibilities of a loan servicer. |
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| • | Loan-To-Value Ratio - The relationship between the amount of the mortgage loan and the appraised value of the property expressed as a percentage. |
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| • | Lock - The period, expressed in days, during which a lender will guarantee a rate. |
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| • | Lock Period - A lock period refers to the amount of time prior to closing that you can secure an interest rate for your loan. Generally, lock periods range from 30 days to over 90 days. Generally, the longer the lock period, the more you pay in points or interest. If your loan is "lockable", your Lender will identify the available lock period. |
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| • | Lockable - You can "lock in" the current interest rate for a set length of time, usually 30, 45 or 60 days. By "locking in" a rate the interest rate is locked and if interest rates increase, your "locked in" rate will not change. To lock an interest rate, you must enter into a written agreement with your Lender. |
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