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Glossary L
Late Charge
Amount charged to the borrower if the payment is made after the grace period. Usually 15 days.
LIBOR
See London Interbank Offered Rate
Lien
A monetary claim against a property. Most liens must be satisfied (paid) prior to closing a refinance or a sale of a property.
Loan Application
The document that is completed at the beginning of the loan process. It contains all the vital information about the borrowers, i.e. name, address, employment history, income information, and a listing of assets and liabilities. Also called a 1003.
Loan Application Fee
A fee charged by some lenders upon application. I don not feel an application fee should be paid.
Loan Origination Fee
A fee charged by lenders, ostensibly to compensate them for processing the loan. Usually 1% of the loan amount. As you will see in the “Pricing” section of this site, it is really nothing more than another way to make money.
Loan-To-Value Ratio (LTV)
The ratio of the mortgage amount compared to the value of the property. If a home has a loan of $350,000, with a value of $600,000, the LTV would be 58%. ($350,000 divided by $600,000.) For conventional loans, a LTV of 80% or above will require Mortgage Insurance.
Lock
A lender can guarantee a certain interest rate and points by locking your loan. There are different lengths of time a loan can be locked for, i.e. 15 days, 30 days, etc. A lock will protect a borrower against rate increases during the time of the lock. Some people like the loan to be locked at the time of application. Others want to wait to see what the market will do. This can be risky as the market can change quickly. The lender locks the loan for the borrower.
London Interbank Offered Rate (LIBOR)
A common index for Adjustable rate mortgages.
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Letter A