Washington State Department of Financial Institutions

Glossary of Terms

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L

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.

Lender - Any person or entity advancing funds, which are to be repaid.  A general term encompassing all mortgagees, and beneficiaries under deeds of trust.

Liabilities - Your debts and other monetary obligations.

Liabilities - All claims against a corporation which include salaries, wages, dividends declared payable, accrued taxes payable.

Lien - A legal claim filed against your property that must be satisfied when the property is sold. With respect to a mortgage, it is the right of the lender to take the title to your property if you do not make the payments due on the mortgage.

Liquidity - In credit union terms, that portion of total assets not held in fixed assets and not loaned to members. These are the funds for which the credit union must make investment decisions.

Listing Agent - A real estate agent obtaining a listing, as opposed to the selling agent.

Load - A sales commission charged by many mutual funds. Some are front-end loads (fee paid when the shares are purchased) or back-end loads (fees paid when the shares are sold).

Loan Balance - The amount owed, including principal and interest.

Loan Flipping - A lender refinances your loan more than once with a new long-term, high cost loan. Each time the lender "flips" the existing loan; you must pay points and assorted fees.

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 Origination Fees - The fee paid to your mortgage lender for processing the mortgage application. This fee is usually in the form of points. One point equals 1% of the mortgage amount.

Loan to Value Ratio - The relationship between the amount of a mortgage loan and the appraised value of the security, expressed as a percentage of the appraised value.

Loan - Money borrowed that is usually repaid with interest.

Loan-To-Value (LTV) Ratio - A percentage calculated by dividing the amount borrowed by the price or appraised value of the home to be purchased; the higher the LTV, the less cash a borrower is required to pay as down payment.

Lock-in rate - A written agreement guaranteeing a specific interest rate when your mortgage closes.

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.

Low-Down-Payment Feature - A feature of a mortgage, usually a fixed-rate mortgage that helps you buy a home with as little as a 3% down payment.

Lump Sum - a single loan advance at closing

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