Real Estate and Mortgage Terms Glossary

If you need a more in-depth understanding of a particular term, or have additional questions on any of these definitions, please contact us directly and we'll be happy to assist you.

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Terms starting with Letter L

LANAI

A screened enclosure area (usually over a patio or pool) in the back of a Florida home.

LATE CHARGE

An extra charge, or penalty added to a regular mortgage payment when the payment is made late by an amount of time specified in the original loan document.

LATENT DEFECTS

Any defect in a piece of property which is not readily apparent, but which has an impact of the value. Structural damage or termite infestation would be examples of latent defects. See Home Inspections.

LEAD

Prior to 1978, paints and other products containing lead were widely used in homes and offices. Lead is a hazardous material and causes a number of health-related problems. See Lead Disclosure.

LEASE

A contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force.

LEASEHOLD ESTATE

A type of property "ownership"  where the buyer actually has a long-term lease on the property.

LEASE OPTION

A lease agreement that gives the tenant an option to buy the property. Usually, a portion of the regular monthly rent payment will be applied towards the down payment.

LEGAL DESCRIPTION

The description of a piece of property, identifying its specific location in terms established by the municipality or other jurisdiction in which the property resides. Often related in specific distances from a known landmark or intersection.

LENDER

The person or entity who loans funds to a buyer. In return, the lender will receive periodic payments, including principal and interest amounts.

LEVERAGE

The use of borrowed funds to finance the purchase of an asset. OPM - Using "other peoples money."

LIABILITIES

A person's outstanding debt obligations. See Loan Closing Costs.

LIABILITY INSURANCE

Insurance that covers against potential lawsuit brought against a property owner for alleged negligence resulting in damage to another party.

LIEN

Any claim against a piece of property resulting from a debt or other obligation.

LIFE CAP

A limit on how far the interest rate can move for an Adjustable Rate Mortgage.

LIKE-KIND PROPERTY

Any property which is substantially similar to another property.

LIMITED REPRESENTATION

Representation duties of a transaction broker limited in the areas of loyalty and disclosure.

LINE OF CREDIT

An extension of credit for a certain amount for a specific amount of time. To be used by the borrower at his discretion.

LIQUID ASSET

Any asset which can be quickly converted into cash at little or no cost, or cash itself.

LISTING AGREEMENT

A written employment agreement between an owner of real estate and a broker that authorizes the broker to find a suitable buyer or tenant for the property. See The Listing Contract.

LOAN

Money borrowed, to be repaid with interest, according to the specific terms and conditions of the loan.

LOAN OFFICER

A person that "sells"  loans, representing the lender to the borrower, and the borrower to the lender.

LOAN ORIGINATION

How a lender refers to the process of writing new loans.

LOAN SERVICING

The processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc., carried out by the company where you make your mortgage payments.

LOAN-TO-VALUE RATIO (LTV)

The comparison of the amount owed on a mortgaged property to its fair market value.

LOCK-BOX

The key holder Realtors® use to allow access to your home.

LOCK-IN

An agreement between a lender and a borrower, guaranteeing an interest rate for a loan if the loan is closed within a certain amount of time. See Locking Interest Rates.

LOCK-IN PERIOD

The amount of time the lender has guaranteed an interest rate to a borrower.

LOW DOWNPAYMENT PROGRAMS

A program available on some mortgage products, usually fixed-rate mortgages, that helps you buy a home with a small down payment.

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