Late charges
The penalty charged to the borrower when a payment is made past the due date and any allowable grace period.

Lender
An individual or business entity making a loan.

Lender Paid Mortgage Insurance (LPMI)
Insurance in which the cost of the mortgage insurance is included in the interest rate. Although the interest rate is slightly higher with LPMI, this option usually results in a lower monthly payment and a larger tax deduction.

Lien
A legal claim of a creditor on the property of another as security for a debt.

Lien holder
An individual or entity that has placed a lien on real property.

Lifetime adjustment cap
A limit on how much the variable interest rate can increase during the term of a loan.

Limited Partnership
A form of business ownership that consists of one or more general partners who are fully liable, and one or more limited partners who are liable only for the amount of their investment

Line of credit
An agreement by a lender to extend credit up to a maximum amount for a specified time. In a home equity line of credit, the line of credit is secured by the borrower's home.

Listing price
The asking price of the home, or the price the home is listed for.

Liquidate
To sell assets for the purpose of accumulating cash.

Loan application
The process of providing financial and other information (such as employment history and proposed collateral) by a prospective borrower in conjunction with a request for credit.

Loan amount
The amount of debt, not including interest.

Loan term
The period of time during which a loan must be repaid. For example, a 30-year fixed loan has a term of 30 years. Also called term. See maturity date.

Loan-to-value ratio (LTV)
The ratio between the unpaid principal amount of your loan, or your credit limit in the case of a line of credit, and the appraised value of your collateral. Expressed as a percentage.

Lock-in
A lock period refers to the amount of time prior to closing that you can secure an interest rate for your loan. Generally, lock periods range from 30 days to more than 90 days. Generally, the longer the lock period, the more you pay in points or interest.

Loss Payable Clause
An insurance policy provision for payment of a claim to someone other than the insured, who holds an insurable interest in the insured property.