Glossary

Lien. Any claim against a property, including mortgages, unpaid taxes or repair bills or other unpaid charges. Prospective property buyers conduct a title search to determine whether any liens against the property exist. A lien must be filed or recorded with the local county government to be attached to a property title.

Loan-to-Value: A ratio calculated by dividing the mortgage amount by the value of the property. A lender will often use the lower of the purchase price or the appraised fair market value when the loan is used to purchase a property.

Lien An encumbrance against property for money due, either voluntary or involuntary.

Lender The bank, mortgage company, or mortgage broker offering the loan.

Lifetime cap A provision of an ARM that limits the highest rate that can occur over the life of the loan.

Loan to value ratio (LTV) The ratio of the amount of your loan to the appraised value. The LTV will affect programs available to the borrower and generally, the lower the LTV the more favorable the terms of the programs offered by lenders.

Lock period The amount of time that a lender will guarantee a loan's interest rate. Once you've locked in the interest rate on a loan, the lender will guarantee that rate for a certain period of time, usually for 30, 45 or 60 days.

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.

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