L Flashcards
LEASE-PURCHASE MORTGAGE LOAN
An alternative financing option that allows low- and moderate-income homebuyers to lease a home 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 accumulates in a savings account for a down payment.
LEASEHOLD
A form of real estate property rights. When a buyer acquires leasehold property, they purchase the improvements but lease the land for a certain term. At the end of the term, they may or may not have the opportunity to purchase the land or renew the lease.
LENDER’S TITLE INSURANCE
Insurance that protects the lender against loss from title defects or liens that should have been cleared up prior to issuance of a title policy.
LIBOR
The London Interbank Offered Rate. The LIBOR is a type of index that is used to determine interest rates for adjustable-rate mortgages.
LIEN
A claim upon a piece of property for the payment or satisfaction of a debt or obligation.
LIEN THEORY STATE
States in which mortgages are secured by a lien. Homeowners hold the title to the home during the loan term. In lien theory states, foreclosure is a judicial process.
LOAN ESTIMATE
A federal disclosure that must be provided to loan applicants no more than three business days after receiving the completed application. This disclosure provides an estimate of the costs of the loan for which the borrower has applied. Effective October 3, 2015, the Loan Estimate replaces the Good Faith Estimate (GFE) and the Early TIL Disclosure previously required under RESPA and TILA for most transactions.
LOAN FLIPPING
The repeated refinancing of the same loan within a short period of time.
LOAN ORIGINATOR
Uniquely defined with specific differences under the mortgage lending laws of each state, a loan originator is generally an individual that arranges funding or negotiates mortgage loans for a potential borrower. The term may also be applied generally to any individual or entity that initiates the process for obtaining a mortgage loan. A loan originator may work under the supervision of a mortgage broker, mortgage banker, or a lender.
a.k.a.: Loan officer
LOAN-TO-VALUE RATIO (LTV)
The relationship between the amount of the mortgage loan and the lower of the appraised value of the property or the purchase price. Loan-to-value ratio is expressed as a percentage.
