| L |
|
Lock (verb)
Act of committing to a mortgage rate taken by a borrower some time between the application and the closing dates. This action is occasionally accompanied by a payment by the borrower to the lender. Contrary of float. |
|
Lock (noun)
Period (days) during which a lender will guarantee a rate. Some lenders will lock rates at the time of application whereas others will let the borrower lock the rate once the application is taken.
|
|
Loan-To-Value Ratio
Relationship between the amount of the mortgage loan and the appraised value of the property (expressed as a percentage). A loan-to-value ratio of 90 indicates that a borrower is borrowing 90% of the value of the property and paying 10% as a down payment. For purchases, the value of the property is assumed to be the purchase price. For refinances, the value is established by an assessment. |
|
Loan Origination Fee
Fee charged by a lender to arrange all the documents associated with a mortgage. |
|
Life of Loan Cap (Lifetime Cap)
Highest interest rate that can be charged throughout the life of the loan. This value is frequently expressed as an increment above the initial loan rate. For instance, an adjustable rate loan with an initial rate of 7.25% and a 6% lifetime cap will under no circumstances adjust above a rate of 13.25% (7.25+6.0). |
|
Lien
Legal claim or attachment against real estate as security for payment of an obligation. |
|
Lender Buy-Down Mortgage
Convertible mortgage which offers a discounted interest rate at the beginning of the loan that slowly increases to an agreed-upon fixed-rate over the first few years of the loan. This type of mortgage loan provides lower initial payments and a stable final monthly rate, but the final rate might be rather higher than on a standard fixed-rate mortgage. |
|
Lender
The mortgage company, mortgage broker, or bank offering the loan. Numerous institutions only "originate" loans and then resell the obligation to third parties. |
|
| « Back to Glossary |
