Real Estate Glossary

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Land Contract: An agreement for the purchase or sale of real property. 

Late Charge: The penalty a borrower must pay when a payment is not made by the specified number of days. 

Lease: A contract between the owner of real property, called the lessor, and another person, called the lessee, covering conditions under which the lessee may occupy and use the property at a specified time period.

Lease Option: A lease under which the lessee has the right to purchase the property. The option may run for the length of the lease or only for a portion of the lease period.

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.

Legal Description: A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.

Lender: A representative of a lending institution who represents the borrower to the lending institution to help him/her secure a loan.

Lender: A term which can refer to the institution making the loan or to the individual representing the firm. Loan officers are often referred to as "lenders."

Leverage: The use of a small amount of cash to control a large amount of property values.

Liabilities: A person's financial obligations. Liabilities include long-term and short-term debt.

Liability Insurance: Usually part of a homeowner’s insurance policy, a 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.

Lien: A legal claim against property for money, either voluntary or involuntary.

Life Cap: A limit on the amount that interest rate can increase or decrease over the life of an adjustable-rate mortgage.

Life Estate: An interest in real property for the life of a living person. The interest then reverts back to the grantor or on to a third party. This is useful for investors who want to purchase a property they believe will be more valuable in the future. The seller retains the right to live in or occupy the property until their death. The buyer pays less than the current market value for the property since they will not get possession of the property or collect any rent until the seller dies.

Line of Credit: An agreement by a financial institution to extend credit up to a certain amount for a certain time to a specified borrower.

Liquid Asset: A cash asset or an asset that can easily converted into cash. 

Liquidate: Disposal of property or settlement of debts. 

Liquidity: The ability of property to be exchanged for cash.

Lis Pendens: A recorded notice to warn all persons that the title or right of possession of certain real property is in litigation. 

Listing: An employment contract between owner and broker authorizing broker to perform services involving the principal's property.

Loan: A sum of borrowed money (principal) that is usually repaid with interest. 

Loan Broker: One who, for a fee, brings together a borrower and lender, and handles the necessary applications for the borrower to obtain a loan against real property by giving a mortgage or deed of trust as security. 

Loan Costs: The actual expense for services used in obtaining a loan. Such expenses include appraisal fees, attorney fees, survey fees, loan commissions. Usually itemized for the benefit of the borrower. 

Loan Officer: A representative of a lending institution who represents the borrower to the lending institution to help him/her secure a loan.

Loan Origination: The lender's process of obtaining new loans.

Loan Representative: A representative of a lending institution who represents the borrower to the lending institution to help him/her secure a loan.

Loan Servicing: The entire process of handling loan payments for the lender.

Loan-To-Value: The ratio of the mortgage loan amount to the properties appraised value (or the selling price, whichever is less). 

Lock-in: An agreement in which the lender guarantees a specified interest rate for a certain amount of time at a certain cost.

Lock-in Period: The time period during which the lender has guaranteed an interest rate to a borrower.