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

Listing

The green light or authorization for a real estate agent to market and sell a piece of land or home.

Loan application

The documentation necessary for applying for a loan which lists and highlights the potential borrower's financial situation.

Loan application fee

A fee charged by the lender in order to accept and process the loan application.

Loan consolidation

Usually referenced in terms of student loans. This process allows students to combine several educational loans into one new loan, extending the loan repayment period, and permitting one monthly payment. This is generally a relief to newly graduated students since the combined loan repayment is substantially less than paying several loans each month.

Loan fraud

A federal crime committed when a borrower gives false information on a loan application in order to qualify for a better loan.

Loan origination

When a mortgage lender receives a mortgage which is secured by real property. Also described as the process by which a lender comes to obtain a loan.

Loan origination fee

A fee assessed by the lender for underwriting a loan. This fee covers the time and preparation associated with the inception of a new loan.

Loan processing fee

Similar to a loan origination fee. A fee charged by the lender for accepting a new loan application and gathering all the necessary documentation.

Loan servicing

The process of collecting and managing monthly payments. Typically a separate company which processes the payments, sends statements, manages the escrow/impound accounts and makes sure that taxes and insurance premiums made on time. Sallie Mae is an example of a company who services student loan accounts.

Loan term

The period of time in which the borrower has to repay the loan as specified in the original loan contract. Auto loans are typically 4 years, whereas mortgages have a loan term of 15 or 30 years.

Loan to value ratio (LTV)

It is the ratio of the home loan taken to the appraised value or the sale price, whichever is lower. Lower the LTV, better are the terms offered to the borrower.

Lock

The guarantee you should receive from your lender stating that the mortgage rate quoted will not change for a set amount of time. You want to the lock to stay in effect until closing.

Lock and float

A situation where a borrower can lock in an interest rate on a mortgage over a specific amount of time while also letting the rate float down if the market improves before the closing date.

Lock-in

An agreement in which the home buyer is guaranteed a specified rate of interest, provided the loan deal is closed within a certain period of time, It also includes the cost to be paid at closing.

Long term capital gain or loss

Your total profit or loss from a capital asset that was yours for a period of more than 12 months.