Mortgage Terms
A, B, C, D-E, F-G, H-K, L-M, N-Q, R-S, T-Z
Land Contract
an installment plan for buying a house, used as an alternative to obtaining
a traditional mortgage loan.
Late Charge
a penalty assessed for failure to make a payment on time.
Lease with Option to Purchase
a lease in which the monthly rent payment applies to a first mortgage, plus
an amount set aside to accumulate for a down payment.
Lien
a legal claim by one party on the property of another party. In a mortgage,
it is used as security for repayment of the loan.
Lis Pendens
a notice that a legal dispute exists over a property.
Listing Agreement
an agreement between a property owner and a real estate broker, authorizing
the broker to find a buyer for the property. If the sale is consummated, the
listing broker will be paid a fee.
Loan Officer
a qualified individual who helps borrowers through the selection, processing
and closing of mortgage loan. The loan officer may be an employee of a mortgage
broker, mortgage banker, or other lending institution.
Loan-to-Value Ratio (LTV)
the ratio of the mortgage loan amount to the property's appraised value or
selling price, whichever is less. For example, a property appraised at $100,000
with a mortgage amount of $75,000 is said to have a 75% LTV.
Margin
the number of percentage points the lender adds to the index rate to calculate
an ARM interest rate.
Maturity
the date on which the principal balance of a loan becomes due and payable.
Mortgage
a lien or claim against real property given as security for a loan.
Mortgage Banker
financial intermediaries that orginate mortgage loans through loan officers
or independent mortgage brokers and sell the mortgages into the secondary
mortgage market.
Mortgage Broker
a company or individual who assists borrowers in obtaining a loan, usually
through a variety of lenders and programs.
Mortgage Insurance
insurance that may be required by the lender for a high loan-to-value ratio.
The policy insures the lender against loss in the event of a default, and
is generally added to the monthly mortgage payment. Mortgage insurance may
be issued by a government agency such as FHA, or by a private company (PMI)
and can usually be eliminated once 20% of the principal is paid off.
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