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Late Charge
The penalty a borrower must pay when a payment is made a stated number of days (usually 10-15) after the due date.

Late Payment
A payment made later than agreed upon in a credit contract and on which additional charges may be imposed.

Lease
A contract that allows you to use or occupy property (such as a car, an apartment or a computer) for a set amount of time, during which you make regular payments.

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.

Lease-Purchase Mortgage
A financing option that allows a potential home buyer to lease a property with the option to buy. Often constructed so the monthly rent payment covers the owner's first mortgage payment, plus an additional amount as a savings deposit to accumulate cash for a downpayment. A seller may agree to a lease-purchase option if the housing market is saturated and the seller is having difficulty selling the property.

Legal Description
A property description, recognized by law, using a government rectangular survey, metes and bounds, or a plat map to sufficiently locate and identify a property.

Lender
A financial institution, agency or school that provides the money to make a loan to a borrower.

Lender's Fees
Fees paid to the lender to cover costs associated with processing, underwriting and closing of the loan.

Lessee
A person who signs a lease to get temporary use of property.

Lessor
A company that provides temporary use of property usually in return for periodic payment.

Liability
A financial obligation or other amount you owe.

Liability Insurance
Insurance coverage that protects you against injuries you cause to other people, or damage you cause to their property.

Liability on an Account
Legal responsibility to repay debt.

Lien
A secured claim upon a piece of property for the payment or satisfaction of a debt or obligation.

Life Estate
An estate in real property for the life of a living person. The estate then reverts back to the grantor or to a third party.

Lifetime Rate Cap
For an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase or decrease over the life of the loan.

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.

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

Liquidity
A measure of the ease with which an asset can be converted to cash without the loss of principal.

Lis Pendens
A legal document filed in the office of the county clerk giving notice that an action or proceeding is pending in the courts affecting the title to the property.

Living Will
A legal document that voices your medical decisions if you are unable to speak for yourself as a result of medical incapacitation.

Loan
When a lender gives money or property to a borrower, and the borrower agrees to return the property or repay the borrowed money, along with interest, at a predetermined date in the future.

Loan Amount
A sum of borrowed money (principal) that is generally repaid over time with interest.

Loan Application
A document required by a lender prior to loan approval. The application includes detailed information about the borrower and the property.

Loan Commitment
A written agreement between lender and borrower to loan money at a future date, subject to the specified terms and conditions.

Loan Origination
The process by which a mortgage lender makes a home loan and records a mortgage against the borrower's real property as security for repayment of the loan.

Loan Origination Fee or Points
Charge by a lender or broker connected with originating a loan. This is different than discount points which are used to buy down the rate of interest.

Loan Servicing
The collection of mortgage payments from borrowers and related responsibilities of a loan servicer.

Loan-to-Value Ratio (LTV)
Proportion of a home's value upon which an institution will issue a loan. It is calculated by dividing the loan amount by the lesser of the sales price or appraised value of a property.

Lock
Lender's guarantee that the mortgage rate quoted will be good for a specific number of days.

Lock-in
A written agreement in which the lender guarantees a specified loan program interest rate and points if a mortgage goes to closing within a set period of time.

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

Lock noun
The period, expressed in days, during which a lender will guarantee a rate. Some lenders will lock rates at the time of application while others will allow the borrower to lock the rate after the application is taken. Request information from your lender regarding lock procedures.

Lock verb
The act of committing to a mortgage rate. This action, taken by a borrower some time between the application and the closing dates, is sometimes accompanied by a payment by the borrower to the lender. Opposite of float