MORTGAGE DICTIONARY

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L/V: Short form for "Loan-to-value ratio".

LATE CHARGE:
A fee or penalty to be paid to a lender for a payment which is delivered after it is due.

LEASEHOLD MORTGAGE:
A loan secured against a tenant's interest in a property.

LENDER:
Any individual or company which provides money to third parties in return for periodic payments of interest and principal over time.

LENDER OPTION COMMITMENTS:
A contract between a lender and potential borrower which allows a lender to provide certain loans at certain times on terms set out in the contract but also allows the lender to choose not to provide such loans.

LENDER'S TITLE INSURANCE:
A policy of Title Insurance which covers the interest of a lender on a mortgage registered on title to a property.

LETTER OF COMMITMENT:
See "commitment Letter".

LETTER OF CREDIT:
An agreement between a bank and a borrower which allows the borrower to use money on the bank's credit.

LEVEL-PAYMENT MORTGAGE:
A land loan which requires regular, even payments.

LIFE CAP:
The maximum interest rate chargeable under an adjustable or variable rate mortgage over its life.

LIFETIME PAYMENT CAP:
The maximum increase or decrease in the amount of each periodic payment allowable over the life of an adjustable or variable rate mortgage.

LINE OF CREDIT:
A very flexible form of loan in which the lender agrees to make a certain amount of money available to the borrower at a certain rate of interest. The borrower may use as much of the amount available as she wishes and may pay out all or any part of the amount owing at any time or re-borrow such funds at her leisure.

LOAN:
See also "mortgage". A transfer of money or other property from one party to another upon the expectation that the money or other property will be returned (often with additional payments as well).

LOAN APPLICATION:
The form completed by a potential borrower which provides information the prospective lender requires to assess the borrower's suitability for a loan.

LOAN APPLICATION FEE:
The charge paid by the borrower for the honor of requesting a loan and of having the lender consider the request.

LOAN COMMITMENT:
See "commitment letter".

LOCK OR LOCK IN:
Obtain a commitment from a lender to guarantee a certain interest rate or other loan feature for a set period of time.

LOCK PERIOD:
The time span over which the lender guarantees a feature of a loan.