Real Estate 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.

• Legal Description - A specific way of identifying and locating a piece of real estate that is acceptable to a court.

• 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) Ratio - A percentage calculated by dividing the amount borrowed by the price or appraised value of the home to be purchased; 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.