A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
L
Land - In the law, the surface of the earth, descending down in a cone shape to the very center, and upward to the heavens. This includes all natural things thereon, as well as artificial things attached to the land.
Land Contract - See Contract for Deed.
Landlord - The owner of property rented to another.
Land Lease - See Ground Lease.
Landlocked - A lot with no access to public thoroughfare except through an adjacent lot is said to be landlocked.
Land Trust - A revocable living trust that is generally used to hold title to real estate for the purposes of privacy and anonymity. Also known as an Illinois Land Trust or Nominee Trust. The land trustee is a nominal title holder. Beneficiaries have the exclusive right to control and direct the trustee’s actions.
Lease - A contract in which a lessor transfers the rights to possession of a property to a lessee for a certain period of time.
Lease Option - A lease combined with an option agreement. This agreement gives the lessee the right to purchase the leased property under certain conditions.
Lease Purchase - a lease combined with a purchase agreement. Under this agreement, the lessee is obligated to purchase the leased property under certain conditions.
Leasehold - the interest or estate on that a lessee’s lease is applied to.
Leasehold Estate - A method of holding title to a property. In this method, the mortgagor does not own the property, but instead has a recorded long-term lease on it.
Legal Blemish – Any detrimental blemishes on a piece of property, for example, a fraudulent title claim or zoning violation.
Legal Description – A legally acceptable identification of real estate obtained by a government survey, recorded plat, or metes and bounds.
Legal Notice - Bringing something to another's attention in a legally recognized manner.
Lender - One who advances money to another in the expectation of receiving repayment of the money plus a fee for the use of the money.
Lessee – Under a lease, a person to whom property is rented.
Lessor – A person who rents property to another person under the terms of a lease.
Let – The act of renting a property to a tenant (lessee).
Letter of Intent (LOI) – A written letter from one party to another that expresses the desire to enter into a contract without actually doing so.
Leverage - The effect borrowed money has on an investment.
Levy - To assess, as in a tax or a fine.
Liabilities - A person's financial obligations and/or debts. These include both long-term and short-term debt, in addition to potential losses from legal claims.
Liability Insurance - Insurance coverage against claims alleging that a property owner's inappropriate action and/or negligence resulted in bodily injury or property damage to another person. See also Homeowner’s insurance.
License - An authorization for a particular person or entity to do some act on the land or property of another.
Lien - A claim on another person’s property as security for money owed. Types of liens include judgments, mortgages, mechanic's liens, and unpaid taxes.
Lien Theory State - A state in which the legal title of a mortgaged property belongs to the mortgagor (borrower), with the mortgage as a lien against the property. Example: Texas. See Title Theory State for contrast.
Life Estate - An interest in a property that is terminated upon the death of a certain person.
Life Tenant – A person who is allowed to use property for life or, in some cases, the lifetime of another designated party.
Lifetime Cap - The highest amount that an adjustable mortgage can be raised over the initial interest rate. These caps usually fall within the range of 5.0% - 7.0%. For example, if the initial interest rate is 5.25% and the lifetime cap is 6.0%, the highest interest rate a borrower might be required to pay during the life of the loan would be 11.25% (5.25% + 6.0%).
Like-Kind Property - Property that shares the same nature.
Limited Liability Company (LLC) - A cross between a corporation and a partnership, the LLC must be created by documents filed in the same place as corporations. This entity enjoys most of the same tax benefits as partnerships, but the same liability protection as corporations.
Limited Partnership – A partnership in which at least one partner is passive and whose liability is limited to the amount invested. There also must be at least one partner whose liability extends beyond just monetary investment.
Line Of Credit - An agreement by a lender to extend credit up to a given amount for a given period of time without requiring the borrower to file a new application.
Liquidated Damages - An agreed amount stated in a contract that one party will pay another in the event of a breach of contract.
Liquidity – The ease of changing assets into cash.
Lis Pendens – A Latin term meaning "suit pending." The recorded notice of a lawsuit’s filing. The outcome of the lawsuit may affect title to a real property.
Listing – A written agreement between a principal and an agent that authorizes the agent to perform services for the principal that involve the principal's property.
Living Trust - A trust that goes into effect during the lifetime of the person who created it, called the settlor.
Loan Application (1003) - A loan application necessary for conforming loans. This application is now considered the standard application for most residential loans, even non-conforming loans.
Loan Origination Fee – In most cases, a lender will charge a borrower an origination fee, or "points," to process a loan. A point is equal to one percent of the total loan amount.
Loan Officer - An employee of a financial instutution charged with the responsibility of generating loan business.
Loan Package - An organized group of documents containing all of the necessary information to obtain an underwriting decision of loan approval or loan denial. A package may contain some or all of the following documents, depending on the type of loan and lender: loan application, statement of use of funds, statement of net worth, P & L statements, pay stubs, tax returns, statements from various types of banking and investment accounts, letters of explanation, property appraisal, verification of employment, credit report, verification of housing payments, purchase agreement, etc. (See definition of "underwriting" below.)
Loan-to-Value (LTV) - The ratio of a loan’s amount to the value of the property. If the loan is $80,000 and the value of the property is $100,000, this means that the LTV is 80%.
Lockbox - A special temporary box attached to the door of a property with a key inside that requires a combination or code to open. It is most typically used by real estate agents.
Lot and Block – A means of identifying a property’s legal description. See Legal Description.
Lot Line - a line that bounds a lot. The line is described in a property survey.
Low-Documentation Loan - A mortgage requiring only a very small amount of verification of assets and income.
Low-Down-Payment loan - A home loan requring the borrower to make a small down payment before he or she obtains the necessary financing for purchase of a house.
