Late Charge
Penalty paid by a borrower when a payment is made
after the due date.
Lease Purchase Agreement
An agreement whereby the buyer signs a property
lease with the intention of purchasing it at a
specified price on specified date thereafter.
Lender
The bank, mortgage company, or mortgage broker
offering the loan.
LIBOR (London Interbank Offered Rate)
The interest rate charged among banks in the
foreign market for short term loans to one
another. A common index for ARM loans.
Lien
A claim against a property for the payment of a
debt. A mortgage is a lien; other types of liens a
property might have include a tax lien for overdue
taxes, or a court judgment lien, or a mechanics
lien for unpaid debt to a contractor.
Lien Search
A search on the seller and the co-op corporation
to determine if there are any liens, loans
or judgments which may have an effect on
your ownership of the unit.
Lifetime cap
A provision of an ARM that limits the highest rate
that can occur over the life of the loan.
Liquidity
Cash or cash equivalents that a borrower has
accumulated or the ability to readily convert
other assets or investments into cash; a.k.a. cash
reserves.
Loan Application
An initial statement of personal and financial
information required to apply for a loan.
Loan Application Fee
Fee charged by a lender to cover the initial costs
of processing a loan application. The fee may
include the cost of obtaining a property
appraisal, a credit report, and a lock-in fee or
other closing costs incurred during the process or
the fee may be in addition to these charges.
Loan Origination Fee
Fee charged by a lender to cover administrative
costs of processing a loan.
Loan-to-Value Ratio (LTV)
The relationship expressed as a percentage,
between the amount of the proposed loan and a
property's appraised value or purchase price. For
example, a $75,000 loan on a property appraised at
$100,000 is a 75% loan-to-value.
Lock or Lock-In
A lender's guarantee of an interest rate for a set
period of time. The time period is usually that
between loan application approval and loan
closing. The lock-in protects you against rate
increases during that time. See Rate Lock Policy
