This combination Real Estate Glossary and Personal Finance Glossary provides definitions of commonly used real estate and personal finance terms. All definitions are listed below, arranged in alphabetical order.
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Landscape - Landscape refers to the trees, flowers, planting, lawn, and shrubbery that surround the exterior of a dwelling.
Late Charge - A Late Charge is a penalty applied to a mortgage payment that arrives after the grace period (usually the 10th or 15th of a month).
Lease Charge or Money Factor - A Lease Charge or Money Factor is a complicated method that car dealers use to calculate lease payments. Similar to an interest rate, and you should multiply the money factor by 2400 to approximate the annual percentage rate of your lease. It is not negotiable, but differs from lease-to-lease, car-to-car, and company-to-company. Usually it is not disclosed - that's because car companies are not required to under Regulation M.
Lease with an Option to Buy - A Lease with an Option to Buy is when the renter or lessee of a piece of property has the right to purchase the property for a specific period of time at a specific price. Usually, a lease with an option to buy allows a first-time buyer to accumulate a down payment by applying a portion of the monthly rent toward the down payment.
Lender - A Lender is a person, company, corporation, or entity that lends money for the purchase of real estate.
Lessee - A Lessee is you, or the person leasing a vehicle or residence.
Lessor - A Lessor is the landlord or leasing company, bank or finance company that leases the car or apartment to you.
Letter of Intent - A Letter of Intent is a formal statement, usually in letter form, from the buyer to the seller stating that the buyer intends to purchase a specific piece of property for a specific price on a specific date.
Leverage - Leverage is using a small amount of cash, say a 10 or 20 percent down payment, to purchase a piece of property.
Lien - A Lien is an encumbrance against the property, which may be voluntary or involuntary. There are many different kinds of liens, including a tax lien (for unpaid federal, state, or real estate taxes), a judgment lien (for monetary judgments by a court of law), a mortgage lien (when you take out a mortgage), and a mechanic's lien (for work done by a contractor on the property that has not been paid for). For a lien to be attached to the property's title, it must usually be filed or recorded with a local county government office.
Life Cycle Funds - Life Cycle Funds are mutual funds specifically designed to mirror what many experts feel are optimum ratios of stocks and bonds throughout the different stages in your life. You may be able to choose from 3 or 4 funds, one designed for 20-30 year olds, one for 40-50 year olds, and so on.
Listing - A Listing is a property that a broker agrees to list for sale in return for a commission.
Load - A Load is a sales charge on a mutual fund that can range from 1 to 7 percent. It might be a front-load (payable when you buy into the fund) or a back-load (payable when you cash out). You typically pay this because you want the service of a financial professional selecting and building your portfolio. Your load may decrease the longer you hold the fund. If you cashed out in the first year, you'd pay 6 percent. Cash out three years later and the load may only be 3 percent.
Loan - A Loan is an amount of money that is lent to a borrower, who agrees to repay it plus interest.
Loan Commitment - A Loan Commitment is a written document that states that a mortgage company has agreed to lend a buyer a certain amount of money at a certain rate of interest for a specific period of time, which may contain sets of conditions and a date by which the loan must close.
Loan Origination Fee - A Loan Origination Fee is a one-time fee charged by the mortgage company to arrange the financing for the loan.
Loan-to-Value Ratio - The Loan-to-Value Ratio is the ratio of the amount of money you wish to borrow compared to the value of the property you wish to purchase. Institutional investors (who buy loans on the secondary market from your mortgage company) set up certain ratios that guide lending practices. For example, the mortgage company might only lend you 80 percent of a property's value.
Location - Location is where a property is geographically situated. "Location, location, location" is a broker's maxim that states that where the property is located is its most important feature, because you can change everything about a house, except its location.
Lock-In - A Lock-In is the mechanism by which a borrower locks in the interest rate that will be charged on a particular loan. Usually, the lock lasts for a certain time period, such as 30, 45, or 60 days. On a new construction, the lock may be much longer.
Long-Term Care Insurance - Long-Term Care Insurance is insurance that covers the cost of long-term care in a nursing home, other custodial care settings, or at home.
