glossary

GLOSSARY

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Liabilities

All of the borrower's debts and legal obligations.

Liability insurance-auto

A part of the owner's auto insurance policy that will cover injuries and damage that you, the driver, cause to other drivers and their vehicles when you are at fault in a car accident.

Liability insurance-home

Part of the home owner's insurance policy that protects the home owner against claims from other people for personal injury or property damage.

LIBOR (London Interbank Offered Rate)

A daily reference rate based on short-term interest rates charged among banks in the foreign money market. LIBOR rates are commonly used as a reference rate or index for adjustable-rate mortgages.

Lien

It is the settlement of a legal claim like a mortgage debt made when a property is sold. If there is more than one debt, each debt considered a lien, is paid off in order.

Life cap

A limit or ceiling on the amount a borrower's interest rate can increase or decrease over the life of the loan.

Lifeline account

An account option made mandatory in many states which allows low income customers to have a checking account or savings account. These accounts are basic accounts which incur no monthly fees and require no minimum deposit.

Lifetime learning credit

A tax credit available for a portion of qualified tuition, education, and all related costs. This credit can be claimed for anyone is the taxpayer's family.

Lifetime rate cap

This cap limits the amount that an interest rate can increase or decrease in an adjustable rate mortgage of the life of the mortgage.

Line of credit

The maximum amount a financial institution is committed to lend to a borrower during a designated time period.

Liquid assets

Property and cash that is easily accessible and can be turned into fast cash.

Liquidation

When the debtor's property is sold and the proceeds are used to the benefit of the creditors.

Liquidity

The ability to convert assets into cash without losing significant value.

Lis pendens

A notice which has been filed or recorded to alert all interested parties that there is pending real estate lawsuit over the title or piece of property.

List price

The bottom line price as established by the manufacturer. It is a good practice to not purchase items at list price.