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Late Charge
The penalty a borrower must pay when a payment is made a stated number of days after the due date.
Lease-Purchase Mortgage Loan
An alternative financing option that allows low and moderate income home buyers to lease a home 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 accumulates in a savings account for a down payment.
Liabilities
A person’s financial obligations. Liabilities include long term and short term debt.
Lien
A claim upon a piece of property for the payment or satisfaction of a debt or obligation.
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.
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.
Loan
A sum of borrowed money (principal) that is generally repaid with interest.
Loan to Value Ratio
The relationship between the amount of the mortgage loan and the appraised value of the property expressed as a percentage.
Lock
A lender’s guarantee that the mortgage rate quoted will be good for a specific number of days from the day of application.
