The Following are real estate terms and topics: Starting With the Letter (L)

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The Following are real estate terms and topics: Starting With the Letter (L)

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Are you confused and overwhelmed by the extensive terms and words used in real estate? Every person working in real estate or planning to buy or sell real estate can benefit from learning some of the terms….

Real Estate Terms L

Late charge
A fee charged for a past-due payment. This charge is usually either a percentage of the lease payment or a fixed dollar amount.

Lease
A contract conveying from one entity to another the use of real or personal property for a designated period of time in return for payment or other consideration.

Leasehold estate
An estate for a fixed length of time, established when a landlord gives up possession of real estate to a tenant, giving the tenant an equitable interest in the property, as defined by lease terms.

Lease-purchase mortgage loan
An alternative financing option that allows low- and moderate-income home buyers to lease a home from a nonprofit organization with an option to buy.

Legal description
A geographical description identifying a parcel of land by government survey, metes and bounds, or lot numbers of a recorded plat, including a description of any portion thereof that is subject to an easement or reservation.

Liabilities
An amount of money in a company that is owed to someone and has to be paid in the future, such as tax, debt, interest, and mortgage payments.

Liability insurance
Insurance for money the policyholder is legally obligated to pay because of bodily injury or property damage caused to another person and covered in the policy.

Lien
A claim placed by a creditor on a real property or other collateral (such as an auto) to secure payment of a debt.

Lifetime payment cap
For an adjustable rate mortgage (ARM), a limit on the amount that payments can increase or decrease over the life of the mortgage.

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. See cap.

Line of credit
A financial agreement under which a bank or other lender agrees to provide a client with loans of money up to an approved limit during a predefined period.

Liquid asset
Actual cash or an investment vehicle that is easily convertible into cash such as bank deposits and money market fund shares. A corporation’s liquid assets, in reference to its financial statement, are cash, marketable securities, and accounts receivable.

Liquidated Damages
When one party breaches a contract, this often causes losses for the other party.

Loan
A sum of money given to an individual or individuals with the intent that it is to be repaid at some future date along with any agreed upon interest.

Loan commitment
A written promise by a lender to make a loan under certain terms and conditions. These include interest rate, length of loan, lender fees, annual percentage rate, mortgage and hazard insurance, and other special requirements.

Loan origination
All of the steps required to initiate a loan from application to final approval and disbursement.

Loan-to-value (LTV) percentage
The relationship between the unpaid principal balance of the mortgage and the value (or sales price, if it is lower) of a property.

Lock-in
A written agreement guaranteeing the home buyer a specified interest rate provided the loan is closed within a set period of time. The lock-in also usually specifies the number of points to be paid at closing.

Lock-in period
A time period for which investors must keep their money invested in an account or investment fund. Withdrawals within this period are either impossible or heavily penalized and thus expensive.

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