Real Estate 101 glossary L-M

Here is “l” and “m”,  couldn’t think of anything with a ‘k”.

 

LALLY COLUMN  A concrete filled steel pipe used to support beams.

 LATE CHARGE  An extra charge, or penalty added to a regular mortgage payment when the payment is made late by an amount of time specified in the original loan document.

LATENT DEFECTS Any defect in a piece of property which is not readily apparent, but which has an impact of the value. Structural damage or termite infestation would be examples of latent defects.

 LEASE Lola and mea REMAX logo A contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force.

 LEASEHOLD ESTATE  A type of property ”ownership” where the buyer actually has a long-term lease on the property.

LEASE OPTION  A lease agreement that gives the tenant an option to buy the property. Usually, a portion of the regular monthly rent payment will be applied towards the down payment.

LEGAL DESCRIPTION  The description of a piece of property, identifying its specific location in terms established by the municipality or other jurisdiction in which the property resides. Often related in specific distances from a known landmark or intersection.

 LENDER  The person or entity who loans funds to a buyer. In return, the lender will receive periodic payments, including principal and interest amounts.

 LIABILITIES  A person’s outstanding debt obligations.

 LIABILITY INSURANCE  Insurance that covers against potential lawsuit brought against a property owner for alleged negligence resulting in damage to another party.

LIEN  Any claim against a piece of property resulting from a debt or other obligation.

 LIFE CAP  A limit on how far the interest rate can move for an Adjustable Rate Mortgage.

 LIKE-KIND PROPERTY  Any property which is substantially similar to another property.

LINE OF CREDIT  An extension of credit for a certain amount for a specific amount of time. To be used by the borrower at his discretion.

LIQUID ASSET  Any asset which can be quickly converted into cash at little or no cost, or cash itself.

 LOAN Money borrowed, to be repaid with interest, according to the specific terms and conditions of the loan.

 LOAN OFFICER  A person that “sells” loans, representing the lender to the borrower, and the borrower to the lender.

LOAN ORIGINATION  How a lender refers to the process of writing new loans.

LOAN SERVICING  The processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc Typically carried out by the company you make payments to.

LOAN-TO-VALUE RATIO (LTV)  The comparison of the amount owed on a mortgaged property to its fair market value.

LOCK-IN  An agreement between a lender and a borrower, guaranteeing an interest rate for a loan if the loan is closed within a certain amount of time.

 LOCK-IN PERIOD  The amount of time the lender has guaranteed an interest rate to a borrower.

MAJOR DEFICIENCY  A deficiency that strongly impacts the usability and habitability of a house. Or a deficiency that may be very expensive to repair.

MANUFACTURED HOUSING  Once known as ”mobile homes,” manufactured housing is any building which has been constructed off site, then moved onto a piece of real property.

MARGIN  The difference between the interest rate and the index on an adjustable rate mortgage.

MARGINAL LAND  Land whose value has been diminished due to some internal defect or external condition. In most cases, the cost to correct the flaw or condition is as much or more than the expected return from the property.

MASTER ASSOCIATION  An umbrella organization that is made up of multiple, smaller home owner’s associations. Often found in very large developments or condominium projects.

MATURITY   The date on which the principal balance of a financial instrument becomes due and payable.

 MERGED CREDIT REPORT    A credit report derived from data obtained from multiple credit agencies.

METES AND BOUNDS   A traditional way of describing property, generally expressed in terms of distance from a known landmark or intersection, and then following the boundaries of the property back to its origin.

METROPOLITAN AREA  The accumulated land in and around a city or other municipality which falls under the political and economic influence of that entity.

MINERAL RIGHTS  The legal right to exploit and enjoy the benefits of any minerals located below the surface of a parcel of land.

MISREPRESENTATION  A statement by one party in a transaction that is incorrect or misleading. Most misrepresentations are deemed to be intentional and thus may constitute fraud. Others, however, some are rendered through simple mistakes, oversights or negligence.

 MORTGAGE  A financial arrangement wherein an individual borrows money to purchase real property and secures the loan with the property as collateral.

MORTGAGE BANKER  A financial institution that provides primary and secondary mortgages to home buyers.

MORTGAGE BROKER  A person or organization that serves as a middleman to facilitate the mortgage process. Brokers often represent multiple mortgage bankers and offer the most appropriate deal to each buyer.

MORTGAGEE  The entity that lends money in a real estate transaction. 

MORTGAGE INSURANCE  A policy that fulfills those obligations of a mortgage when the policy holder defaults or is no longer able to make payments.

 MORTGAGE INSURANCE PREMIUM (MIP)  A fee that is often included in mortgage payments that pays for mortgage insurance coverage.

MORTGAGE LIFE INSURANCE  A policy that fulfills the obligations of a mortgage when the policy holder dies.

MORTGAGOR  The entity that borrows money in a real estate transaction.

MULTI-FAMILY PROPERTIES  Any collection of buildings that are designed and built to support the habitation of more than four families.

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