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Glossary > L
Frequently used terms
Late Charge
Lease
Option
Lease Purchase
Leasehold
LIBOR
Life Cap
Listing
Agent
Loan Commitment
Loan Origination Fee
Loan-to-Value
Ratio (LTV)
Lock In Period
Lally column
A circular pipe filled with concrete that supports girders and
beams.
Laminate
Plastic material used to seal countertops
Lanai
A porch-like room or open-sided living room commonly found in
homes in warm climates.
Landscape architect
A licensed professional who holds a degree in landscape architecture
and is trained in horticulture, design and planning.
Landscape contractor
A licensed professional who carries out the plans of a landscape
architect or a landscape designer.
Landscape designer
A landscape designer has training in horticulture and landscape
planning but does not necessarily hold a degree.
Lap siding
A type of siding composed of horizontal boards with the bottom
of one piece overlapping the top of the piece below it.
Late charge
A fee imposed by a lender when the borrower does not make a
payment on time.
Late payment
A payment a lender receives after the due date has passed.
Latent defect
An invisible problem in a piece of property such as bad wiring,
termite damage or lead paint.
Lead
A metallic chemical element present in older dwellings, primarily
in the form of lead-based paint and lead plumbing.
Leader
A pipe that carries rainwater from the gutters to the ground,
sewers and/or wells.
Lease
A binding agreement that contains the terms and conditions
of a renter's occupancy.
Lease option
A lease that contains the right to purchase the property for
a specific price within a certain time frame.
Lease-Purchase
The lease purchase contract sets the closing date and provides
remedies to the seller if the buyer defaults. (a type of delayed
closing)
Leasehold
The limited interest in a property held by a tenant; primarily
the right to inhabit it for a specified period of time.
At the end of the lease, the property reverts to the owner or
landlord.
Leasehold estate
An arrangement in which the borrower does not own a specific
piece of property but possesses a long-term lease.
Legal blemish
Blemishes on a piece of property such as a zoning violation
or fraudulent title claim.
Legal description
A specific way of identifying and locating a piece of real estate
that is acceptable to a court.
Lender
A bank, savings institution or mortgage company that offers
home loans.
Lessee
A person to whom property is rented under a lease.
Lessor
A person who rents property to another under a lease.
Letter of intent
A formal statement from the buyer stating an intention to purchase
the property for a certain price on a certain date.
Leverage
The use of a small amount of cash (for example, a 5 percent
down payment) to buy a piece of property.
Levy
The amount of money a governing body certifies to be raised
from the collection of property tax.
Liabilities
A borrower's debts and financial obligations.
Liability insurance
An insurance policy that protects owners against claims of negligence,
personal injury or property damage.
LIBOR
Acronym for "London Interbank Offered Rate."
An index used to determine interest rate changes for adjustable
rate mortgages. Very popular index for interest only
mortgage programs.
Lien
A claim laid by one person or company on the property of another
as security for money owed.
Life cap
Limits the amount a loan's interest rate can change during
the mortgage term. For example, if the rate on an adjustable-rate
mortgage begins at 4 percent and has a life cap of 6 percentage
points, it can not go over 10 percent.
Life-cycle cost analysis
An analysis of a building project's expected operating, maintenance
and replacement costs.
Lifetime Payment Cap
For an adjustable-rate mortgage (ARM), a limit on the amount
payments can increase or decrease over the life of the mortgage.
Lifetime Rate Cap
A maximum interest rate or "ceiling" that may not
be exceeded under any circumstances over the entire life of
the loan.
Limited partnership
Real estate syndicates and other investment groups use this
type of ownership. A general partner makes the group's
investment decisions, oversees the investment and is principally
liable for any losses.
Lintel
A horizontal piece over a door or window that carries the
weight of the structure above it.
Liquid assets
Cash and all other assets that can be converted to cash relatively
quickly. Liquid assets can include money in savings and
checking accounts, money-market accounts and most CD's.
Liquidated damages
A sum of money specified in the purchase contract to be paid
by one party to the other in the event of a breach of contract.
Liquidity
The ability to sell an asset at a price close to its true value
and convert it into cash in a short period of time.
Listing
A piece of property placed on the market by a listing agent.
Listing agent
A broker or sales agent who has contracted with a seller to
handle the marketing and sale of a piece of property.
Listing broker
A real estate broker responsible for the listing of the property
and representing the interest of the seller.
Listing inventories
The known number of houses for sale within a given market.
Live-in partnership
An arrangement in which two unrelated people purchase a home.
Live-work space
An officially designated dwelling in which the occupant conducts
a home-based business or enterprise.
Load-bearing wall
A wall that supports not only its own weight, but the weight
of other parts of a home. (also called a bearing wall)
Loan application
A document that details a borrower's income, debt and other
obligations to determine credit worthiness. Also includes
information on the subject property.
Loan application fee
A fee charged by lenders to cover expenses incidental to reviewing
a loan application.
Loan commitment
A promise by a lender or other financial institution to make
or insure a loan for a specified amount and on specific terms.
Loan officer
An official lending institution representative who is empowered
to act on behalf of the lender within certain limits.
Loan origination fee
A fee charged by lenders to cover the direct costs of arranging
the loan.
Loan term
The time set by a lender for a buyer to pay a mortgage.
Most conforming loans have 30 or 15-year terms.
Loan-to-value ratio (LTV)
The ratio of the total loan amount to the value of the property.
For lending purposes, the property value is equal to the purchase
price or the appraised value, whichever is lower.
Local improvement district (LID)
A legal district established by state law to benefit a specific
area. Districts issue bonds to finance improvements such
as sidewalks and sewer systems, then levy assessments on real
estate in the affected area to repay funds.
Lock-in
A lender's commitment to a borrower to guarantee (or "lock
in") a specific interest rate for a limited amount of
time.
Lock-in period
A period of time during which the borrower is guaranteed an
agreed-upon interest rate, even if market rates rise.
The longer the period, the higher the cost (in points) to the
borrower.
Loft
A living space not partitioned into rooms or a small space
built above a larger room.
Log cabin
Homes constructed of rough-hewn timbers.
Louvers
Slatted panels mounted in the upper portion of a gable wall
to provide attic ventilation.
Low density
A low concentration of housing units in a specific area.
Low down-payment loan
A home loan that requires the borrower to make only a small
down payment before obtaining the financing needed to purchase
a house.
Low-documentation loan
A home loan that requires only minimal verification of income
and assets.
Lowball offer
An offer made to a seller that is substantially below market
value.
LTV (loan-to-value ratio)
The ratio of the total loan amount to the value of the property.
For lending purposes, the property value is equal to the purchase
price or the appraised value, whichever is lower.
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