Late Payment - A payment made later than agreed upon in a credit contract and on which additional charges may be imposed.

Lease - A written agreement between the property owner and a tenant that stipulates the payment and conditions under which the tenant may possess the real estate for a specified period of time.

Lease Option - An alternative financing option that allows home buyers to lease a home with an option to buy. Each month's rent payment may consist of not only the rent, but an additional amount which can be applied toward the down payment on an already specified price.

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.

Legal Description - A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.

Lender - Company that performs the functions necessary to complete a mortgage transaction. Lenders include approved sellers, mortgage brokers, and third-party originators (TPOs).

Lender Fees - These are items payable in connection with the loan and contribute to the total amount of the loan's closing costs. These are the fees that lenders charge to process, approve and make the mortgage loan. See Closing Costs for more information.

Liability Insurance - Insurance coverage that offers protection against claims alleging that a property owner's negligence or inappropriate action resulted in bodily injury or property damage to another party. It is usually part of a homeowner's insurance policy.

Liability on an Account - Legal responsibility to repay debt.

Lien - A claim upon a piece of property for the payment or satisfaction of a debt or obligation.

Life Cap - For an adjustable-rate mortgage (ARM), a limit on the amount that the enterest rate can increase or decrease over the life of the mortgage.

Line of Credit - An agreement by a commercial bank or other financial institution to extend credit up to a certain amount for a certain time to a specified borrower.

Liquid Assets - Cash or assets that can be immediately converted to cash.

Loan Amount - The amount of debt not including interest but usually paid with interest.

Loan Officer - Also referred to by a variety of other terms, such as lender, loan representative, loan 'rep,' account executive, and others. The loan officer serves several functions and has various responsibilities: they solicit loans, they are the representative of the lending institution, and they represent the borrower to the lending institution.

Loan Origination - How a lender refers to the process of obtaining new loans.

Loan Program - Defines the scope of your mortgage, including the type of interest rate you have and the mortgage term. For example, your loan program may be for 30 years with a fixed rate or may be for 5 years with an adjustable rate.

Loan Servicing - After you obtain a loan, the company you make the payments to is 'servicing' your loan. They process payments, send statements, manage the escrow/impound account, provide collection efforts on delinquent loans, ensure that insurance and property taxes are made on the property, handle pay-offs and assumptions, and provide a variety of other services.

Loan terms - Different requirements of a loan that determine the borrower's and lender's financial obligations. Common terms are Annual Percentage Rate (APR), principal, and length of loan. Usually, the better the borrower's credit history, the better the loan terms. A good combination of loan terms is simple interest, a low APR and no prepayment penalties.

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

Lock Period - A lock period refers to the amount of time prior to closing that you can secure an interest rate for your loan. Generally, lock periods range from 30 days to over 90 days. Generally, the longer the lock period, the more you pay in points or interest. If your loan is 'lockable', your Lender will identify the available lock period.

Lock-In - A commitment you obtain from a lender assuring you a particular interest rate or feature for a definite time period. Provides protection should interest rates rise between the time you apply for a loan, acquire loan approval and close the loan and receive the funds you have borrowed.

Lockable - You can 'lock in' the current interest rate for a set length of time, usually 30, 45 or 60 days. By 'locking in' a rate the interest rate is locked and if interest rates increase, your 'locked in' rate will not change. To lock an interest rate, you must enter into a written agreement with your Lender.