Glossary of Mortgage Terms

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lien

A claim against a property for the payment of a debt. A mortgage is a lien; other types of liens a property might have include a tax lien for overdue taxes or a mechanics lien for unpaid debt to a subcontractor.

life-of-loan cap

See: cap.

liquidity

The capability of an asset to be readily converted into cash.

loan discount

See: points.

loan origination fee

See: origination fee.

loan-to-value ratio (LTV)

The relationship, expressed as a percentage, between the amount of the proposed loan and a property's appraised value. For example, a $75,000 loan on a property appraised at $100,000 is a 75% loan-to-value.

lock-in

The guarantee of a specific interest rate and/or points for a specific period of time. Some lenders will charge a fee for locking in an interest rate.