Mortgage Glossary

Lease/Purchase:

Assists low- to moderate-income homebuyers in purchasing a home by allowing them to lease a home with an option to buy.  The rent payment is made up of the monthly rental payment plus an additional amount that is credited to an account for use as a down payment.

Lien:

A legal claim against property that must be satisfied when the property is sold.

Loan:

Money borrowed that is usually repaid with interest.

Loan Fraud:

Purposely giving incorrect information on a loan application in order to better qualify for a loan may result in civil liability or criminal penalties.

Loan-to-value (LTV):

A ratio.  A percentage calculated by dividing the amount borrowed by the lower of the price or appraised value on a purchase or the appraised value on a refinance.  The higher the LTV, the less cash a borrower is required to pay as down payment.

Lock-in:

Since interest rates can change frequently, many lenders offer an interest rate lock-in that guarantees a specific interest rate if the loan is closed within a specific time.

Loss Mitigation:

A process to avoid foreclosure.  The lender tries to help a borrower who has been unable to make loan payments and is in danger of defaulting on his or her loan.