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.