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GLOSSARY
Latent defect
A problem with the property that cannot be easily seen. These defects can include the presence of radon, asbestos, or hidden pests, like termites.
Lease
An agreement where the property's owner allows a tenant to use the property in exchange for monies for a set amount of time. This may also pertain to an automobile where the borrower uses the vehicle for a set amount of time in exchange for lease payments. At the end of the lease period, the borrower gives the car back to the dealer or arranges to buy the automobile.
Lease extension
Extending a lease on a property or car past the original end date, typically on a month to month basis.
Lease option
The right to buy the property for a designated price at the end of the original lease period.
Lease purchase mortgage
An option for a potential homebuyer which will allow you to lease a property with the option to buy. The mortgage is often constructed so that the monthly payment will cover the owner's rent and a little extra which is put into an account and can be used for a down payment at the end of the lease.
Lease-like loan
A loan which originates from a credit union and will save the borrower as much as 30 percent due to a big balloon payment at the end of the loan period. This loan may combine features of an auto loan and a lease. There is no down payment or security deposit required.
Leasehold estate
A tenant's right to use the property for a specific time period.
Lessee
The person who signs for the lease.
Lessor
The person who is granting a lease.
Letter of intent
This is a formal notice that the buyer is serious about purchasing the property but is not legally enforceable.
Leverage
The use of a large loan and a small amount of cash to make a purchase.
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.