Glossary - L
Late charge
The sentence a borrower must pay when a payment is made a stated number of days (typically 15) after the due date.
Leasehold estate
A way of holding title to a property wherein the mortgagor does not really own the property but rather has a recorded long-term rent on it.
Legal description
A property description, recognized by law, that is adequate to locate and recognize 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 provides protection against claims alleging that a property owner's negligence or inappropriate action resulted in bodily wrong 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 maximum on the amount that payments can increase or decrease over the life of the mortgage.
Line of credit
An accord by a commercial bank or other financial institution to extend credit up to a certain amount for a certain time to a particular borrower.
Liquid asset
A cash asset or an asset that is simply converted into cash.
Loan
A sum of borrowed money (principal) that is normally repaid with interest.
Loan origination
The process by which a mortgage lender brings into existence a mortgage safe by real property.
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