Real Estate Glossary

Land survey:

A detailed mapping and drawing of a parcel of property. See survey.

Late charge:

The penalty a borrower must pay when a mortgage payment is made a stated number of days (usually 15) after the due date.

Law day:

Reference to a maturity date or sale date with respect to a foreclosure sale or some other statutory or related timeframe. In Connecticut, it is the cutoff date for redemption related to a strict foreclosure.


A written agreement between the property owner and a tenant that stipulates the conditions under which the tenant may occupy and use the real estate for a specified period of time and rent.

Leasehold estate:

A way of holding title to a property wherein the mortgagor does not actually own the property but rather has a recorded long-term lease on it. A ground lease is an example of such an arrangement.

Lease-purchase mortgage loan:

An alternative financing option that allows low- and moderate-income home buyers to lease a home from a nonprofit organization 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 is earmarked for deposit to a savings account in which money for a down payment will accumulate. Rent payments may also be credited to a future purchase under this type of arrangement.

Legal description:

A property description, acceptable by real estate law, which is sufficient to locate and identify the property. One type of legal description is called a "metes and bounds" description.


The party to a loan transaction who has loaned money and is secured by either a mortgage or deed of trust. Lenders may be banks, savings and loans, credit unions or other third parties or individuals.

Lender’s attorney:

A lawyer or law firm that represents the lender in either a loan transaction or foreclosure proceeding. In some states, the lender's attorney schedules and conducts the foreclosure sale.

Lender's attorney's fees:

Fees paid by a lender for legal services and/or advice in conjunction with closing a mortgage loan. These fees may be charged to the borrower.


A person's financial obligations. Liabilities include long-term and short-term debt, as well as any other amounts that are owed to others such as taxes and rent payments.

Liability insurance:

Insurance coverage that offers protection against personal injury claims alleging that a property owner's negligence or inappropriate action resulted in bodily injury or property damage to another party.


A legal claim or encumbrance against a property that must be paid off when the property is sold or refinanced.

Lien theory:

The lien theory is a legal concept wherein a property acts as the security for a loan transaction and in which title is held in the name of the borrower. The mortgage is a legal document that evidences the lien on the property. Upon payment in full, the lien is released, and the mortgage is satisfied.

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. See rate cap.

Lifetime rate cap:

For an adjustable-rate mortgage (ARM), a limit on the total amount that the interest rate can increase or decrease over the life of the loan. See cap.

Line of credit:

An agreement by a bank or financial institution to extend credit up to a specific amount for a certain period of time to a specified borrower. See home equity line of credit or revolving line of credit.

Liquid asset:

A cash asset, government security or an asset that is easily converted into cash.

Lis Pendens:

A Latin phrase that means "pending legal action." In a judicial foreclosure action, a lis pendens is filed with the clerk contemporaneously with the filing of the foreclosure complaint to allow third parties to know that there is a pending legal action that affects the property.

Listing Agent:

The real estate agent employed by the seller to find a buyer and list the property to be sold in the Multiple Listing Service (MLS).


A sum of borrowed money (principal) that is generally repaid with interest as part of a mortgage transaction.

Loan application:

This document, called a 1003, completed by the applicant, contains information about the type of mortgage being applied for and personal financial situation of the applicant.

Loan application fee:

A front-end fee charged by a lender, mortgage broker or mortgage banker to an applicant when a loan application is submitted for purposes of processing the same.

Loan closing:

See closing or settlement.

Loan commitment:

See commitment letter.

Loan flipping:

Inducing a borrower to refinance a loan repeatedly in order to charge high points, costs, and fees each time the loan is refinanced. See also predatory lending.

Loan origination:

The process by which a mortgage lender underwrites and closes a mortgage secured by real property.

Loan program:

A description of the type of loan features, including whether the interest rate changes and how long the loan will last.

Loan settlement:

The act of closing a loan transaction. See closing.

Loan-to-value (LTV) percentage:

The relationship between the principal balance of the mortgage and the appraised value (or sales price if it is lower) of the property. For example, a $100,000 home with an $80,000 mortgage has a LTV of 80 percent.


A written agreement in which the lender guarantees a specified interest rate if a mortgage closes within a set period of time. The lock-in also usually specifies the number of points to be paid at closing. See rate lock. A fee is often charged as part of a rate lock.

Lock-in period:

The time period during which the lender has guaranteed a certain interest rate to a borrower. See lock-in.

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