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Glossary of Terms beginning with L


Lally Column

A concrete filled steel pipe used to support beams.

Late Charge

An extra charge, or penalty added to a regular mortgage payment when the payment is made late by an amount of time specified in the original loan document.

Latent Defects

Any defect in a piece of property which is not readily apparent, but which has an impact of the value. Structural damage or termite infestation would be examples of latent defects.


A contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force.

Lease Option

A lease agreement that gives the tenant an option to buy the property. Usually, a portion of the regular monthly rent payment will be applied towards the down payment.

Leasehold Estate

A type of property ''ownership'' where the buyer actually has a long-term lease on the property.

Legal Description

The description of a piece of property, identifying its specific location in terms established by the municipality or other jurisdiction in which the property resides. Often related in specific distances from a known landmark or intersection.


The person or entity that loans funds to a buyer. In return, the lender will receive periodic payments, including principal and interest amounts.


A person's outstanding debt obligations.

Liability Insurance

Insurance that covers against potential lawsuit brought against a property owner for alleged negligence resulting in damage to another party.


Any claim against a piece of property resulting from a debt or other obligation.

Life Cap

A limit on how far the interest rate can move for an Adjustable Rate Mortgage.

Like-Kind Property

Any property that is substantially similar to another property.

Line of Credit

An extension of credit for a certain amount for a specific amount of time. To be used by the borrower at his discretion.

Liquid Asset

Any assets that can be quickly converted into cash at little or no cost, or cash itself.


Money borrowed, to be repaid with interest, according to the specific terms and conditions of the loan.

Loan Officer

A person that "sells" loans, representing the lender to the borrower, and the borrower to the lender.

Loan Origination

How a lender refers to the process of writing new loans.

Loan Servicing

The processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc., typically carried out by the company you make payments to.

Loan-to-Value Ratio (LTV)

The comparison of the amount owed on a mortgaged property to its fair market value.


An agreement between a lender and a borrower, guaranteeing an interest rate for a loan if the loan is closed within a certain amount of time.

Lock-In Period

The amount of time the lender has guaranteed an interest rate to a borrower.

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