Lease-Purchase Mortgage Loan
An alternative financing option that allows low- and moderate-income homebuyers to lease a home from a nonprofit organization with an option to buy. Monthly rental payments cover mortgage payments and include an additional amount that is saved toward a down payment.
Lender
The bank, mortgage company or mortgage broker offering the loan.
LIBOR (London Interbank Offered Rate)
The interest rate charged among banks for short-term Eurodollar loans, and a common index for ARMs.
Lien
A legal hold or claim on property as security for a debt or charge.
Loan Administration (Loan Servicing)
The collection of mortgage payments from borrowers and related responsibilities (such as handling escrows for property tax and insurance, foreclosing on defaulted loans and remitting payments to investors).
Loan Application
Document required by lenders prior to loan approval containing detailed information about the borrower and property.
Loan Application Fee
A fee paid by prospective buyer to the lender when applying for a mortgage.
Loan Commitment
A written promise to make a loan for a specified amount on specified terms.
Loan Origination Fee
Fee charged by a lender that compensates for the work in evaluating and processing the loan.
Loan Servicing (Loan Administration)
The collection of mortgage payments from borrowers and related responsibilities (such as handling escrows for property tax and insurance, foreclosing on defaulted loans and remitting payments to investors).
Loan-To-Value Ratio
The relationship between the amount of the mortgage and the appraised value of the property, expressed as a percentage of the appraised value.
Lock (Lock In)
A lender’s guarantee of an interest rate and related points for a set period of time, usually between loan application and loan closing. Protects borrower against rate increases during that time.