Mortgage glossary

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Land Registry Certificate: provides details of the property including a plan and, if the property is leasehold, a copy of the lease.

Land Registry fee: a fee paid to the Land Registry to register ownership of a property.

Late Charge or Late Fee: an extra amount of money you have to pay when you are late making your mortgage payment. This also may be called a penalty fee or penalty payment.

Lease purchase: assists low to moderate income homebuyers in purchasing a home by allowing them to lease a home with an option to buy; the rent payment is made up of the monthly rental payment plus an additional amount that is credited to an account for use as a down payment. FFI mortgage glossary.

Lease-Purchase Agreement: a way to purchase a home by first renting the home for a set amount of time and then purchasing the home. This is also called rent-to-own and is extremely useful to people who need time to repair their credit or want to wait for lower interest rates before obtaining a mortgage loan.

Lease-Purchase Mortgage Loan: a way that is available to purchase homes by first leasing the home and then purchasing the home for low income families. This option is offered by Fannie Mae and the families lease the property from the not for profit organization with the opportunity to purchase the home later. Part of the monthly rental payments are saved in order for the renters to have down payment money at the end of their lease in the case they want to purchase the home. FFI mortgage glossary.

Leasehold: if you buy a leasehold property you don't own the property rather the right to live there for a specified period of time, however much time remains on the lease. The owner of the property is called the freeholder or landlord.

Lender: the bank/building society where you have your mortgage.

Lender Appraisal Processing Program: a program through which the Department of Veterans Affairs allows VA approved lenders to conduct their own appraisals of value on a property. The VA may also require one of their own appraisers to also appraise the property in order to determine value for the VA Home Loan Guarantee Program. FFI mortgage glossary.

Lender Buy Down: a particular form of convertible mortgage offering a discounted interest rate at the beginning of the loan that gradually increases during the first few years of the loan. It provides lower initial payments and a stable final monthly rate, but the final rate may be somewhat higher than on a standard fixed rate mortgage.

Lessee: the person to whom a lease is granted - the tenant.

Lessor: the person who grants a lease - the landlord.

Liability: this relates more to commercial mortgages. With a commercial mortgage liability for the repayment of the loan depends on the legal structure of the business: a sole trader will be personally liable for the mortgage debt. Personal assets could be seized if the business defaults. Partners are jointly liable for the debts of the partnership and their personal assets are at risk. With a limited-liability partnership and a limited company, the liability falls firstly on the business rather than on the individual partners and directors. The lender may take a floating charge on business assets in general, rather than simply on the current property being purchased. The lender may also insist on personal guarantees as a condition of granting the loan, in which case the partners and directors may be held personally liable anyway. FFI mortgage glossary.

Liability Insurance: insurance protection against claims alleging negligence or an action which resulted in bodily injury or property damage to another party. It is included in most homeowner's policies.

Lien: a legal claim against property that must be satisfied when the property is sold.

Life assurance: an insurance policy that pays a lump sum on death. Often taken out with a mortgage to provide money for the loan to be repaid if the borrower dies during the term.

Lifetime Cap: with an adjustable rate mortgage this is the highest interest rate than can be charged over the life of the loan.

Life 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 mortgage. FFI mortgage glossary.

Line Of Credit: an agreement to extend credit to a borrower under specified conditions.

Liquid Assets: cash and any other assets that can easily be changed to cash, e.g. certificates of deposit, money market accounts and money in checking and savings accounts.

Loan: money borrowed that is usually repaid with interest.

Loan Approval: when the lender agrees to loan money to a borrower based on information like income, debt, assets, employment, credit worthiness and more.

Loan fraud: purposely giving incorrect information on a loan application in order to better qualify for a loan; may result in civil liability or criminal penalties.

Loan Guarantee Entitlement: the amount of money that you can get from the VA for guaranteeing your home mortgage loan. FFI mortgage glossary.

Loan servicing: the tasks a lender performs to protect a mortgage investment, including collecting monthly payments from borrowers and dealing with delinquencies.

Loan to value (LTV) ratio: the ratio, at any point in time, of the unpaid principal amount of a borrower's mortgage loan to the value of the property that serves as collateral for the loan (expressed as a percentage).

Local authority search: questions to the local authority regarding plans for new road building, planning permission for any building work previously carried out, connection to the mains sewer, etc.

Lock in: since interest rates can change frequently, many lenders offer an interest rate lock-in that guarantees a specific interest rate if the loan is closed within a specific time.

Loss mitigation: a process to avoid foreclosure; the lender tries to help a borrower who has been unable to make loan payments and is in danger of defaulting on his or her loan. FFI mortgage glossary.

LTV: see Loan To Value Ratio.