late charge
The penalty a borrower must pay when a payment is made a stated number
of days (usually 15) after the due date.
lease
A written agreement between the property owner and a tenant that
stipulates the conditions under which the tenant may possess the real
estate for a specified period of time and rent.
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 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. Each month's rent payment consists of principal,
interest, taxes and insurance (PITI) payments on the first mortgage
plus an extra amount that is earmarked for deposit to a savings
account in which money for a down payment will accumulate.
legal description
A property description, recognized by law, that is sufficient to
locate and identify the property without oral testimony.
liabilities
A person's financial obligations. Liabilities include long-term and
short-term debt, as well as any other amounts that are owed to others.
liability insurance
Insurance 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 a property that must be paid off when the
property is sold.
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. See
cap.
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
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. See home equity line of credit.
liquid asset
A cash asset or an asset that is easily converted into cash.
loan
A sum of borrowed money (principal) that is generally repaid with
interest. .
loan limit
Fannie Mae operates exclusively in the secondary mortgage market,
where we help to ensure that money for mortgages is available to home
buyers in every state across the country. In keeping with Fannie Mae's
mission to help more low-, moderate-, and middle-income people buy
homes, our loan limits are adjusted each year, in response to changes
in housing affordability nationwide.
loan origination
The process by which a mortgage lender brings into existence a
mortgage secured by real property.
loan-to-value (LTV)
percentage
The relationship between the principal balance of the mortgage and the
appraised value (or sales price if it is lower) of the property. For
example, a $100,000 home with an $80,000 mortgage has a LTV percentage
of 80 percent.
lock-in
A written agreement in which the lender guarantees a specified
interest rate if a mortgage goes to closing within a set period of
time. The lock-in also usually specifies the number of points to be
paid at closing.
lock-in period
The time period during which the lender has guaranteed an interest
rate to a borrower. See lock-in.
