Land Contract
A real estate installment selling arrangement whereby the buyer may use and occupy land, but no deed is given by seller until the sales price has been paid.

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.

Lease Option Purchase
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.

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

Lessee
A person to whom property is rented under a lease. (Tenant)

Lessor
A person who rents property to another under a lease. (Landlord)

Liabilities
A person's financial obligations. Liabilities include long-term and short-term debt, as well as any other amounts that are owed to others.

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.

Lien
A legal claim or attachment against property as security for payment of an obligation.

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

Life Estate
An estate in real property for the life of a living person. The estate then reverts back to

the grantor or to a third party.

Lis Pendens
Latin for "lawsuit pending." Recorded notice that litigation is pending on a property. Most lenders will require the clearance of the Lis Pendens prior to closing.

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 Origination Fee
Charge by a lender or broker connected with originating a loan. This is different from discount points which are used to buy down the rate of interest.

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-To-Value Ratio (LTV)
The ratio between the amount of a given mortgage loan and the lower of sales price or appraised value.

Lock-In
An agreement in which the lender guarantees a specified interest rate for a certain amount of time at a certain cost.