Lally ColumnA concrete filled steel pipe used to support beams.
Landlord LicensingA tactic used by cities and municipalities to impose a tax on real estate investors. Although usually touted as a method of making sure that properties are safe and up to code, it always includes a fee. Usually home inspections are required by the city, invading the privacy of the renter and inconveniencing the owner and the tenant. It is a tax!
Late ChargeAn 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 DefectsAny 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.
LeaseA 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.
Lease OptionA 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.
Leasehold EstateA type of property "ownership" where the buyer actually has a long-term lease on the property.
Legal DescriptionThe 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.
LenderThe person or entity who loans funds to a buyer. In return, the lender will receive periodic payments, including principal and interest amounts.
LiabilitiesA person's outstanding debt obligations.
Liability InsuranceInsurance that covers against potential lawsuit brought against a property owner for alleged negligence resulting in damage to another party.
LienAny claim against a piece of property resulting from a debt or other obligation.
Life CapA limit on how far the interest rate can move for an Adjustable Rate Mortgage.
Like Kind Exchange or 1031 IRS CodeA 1031 exchange, also known as a like kind exchange, is a transaction under United States law which specifies that if an asset (usually some form of real estate such as land or a building) is sold and the proceeds of the sale are then reinvested in a like kind asset, then no gain or loss is recognized, allowing the deferment of capital gains taxes that would otherwise have been due on the first sale. This law is defined by section 1031 of the Internal Revenue Code. In order to qualify for this exchange, certain rules must be followed.: Both the relinquished property and the replacement property must be held either for investment or for productive use in a trade or business. A personal residence cannot be exchanged. The asset must be of like kind. Real property must be exchanged for real property. Personal property must be exchanged for personal property. The proceeds of the sale must be invested in a like kind asset within 180 days of the sale. However, the property must be identified within 45 days. Frequently, the most difficult component of a 1031 exchange is identifying a replacement property within the first 45 days following the sale of the relinquished property. The IRS is strict in not allowing extensions. A 1031 exchange is similar to a traditional IRA or 401K retirement plan. When someone sells assets in tax-deferred retirement plans, the capital gains that would otherwise be taxable are deferred until they begin to cash out of the retirement plan. The same principal holds true for tax-deferred exchanges or real estate investments. As long as the money continues to be re-invested in other real estate, the capital gains taxes can be deferred. Unlike the aforementioned retirement accounts, rental income on real estate investments will continue to be taxed as net income is realized. An alternative to a 1031 exchange for someone who wants to defer capital gains tax but does not want to continue to hold property is a structured sale.
Like-Kind PropertyAny property which is substantially similar to another property.
Line of CreditAn extension of credit for a certain amount for a specific amount of time. To be used by the borrower at his discretion.
Liquid AssetAny asset which can be quickly converted into cash at little or no cost, or cash itself.
LoanMoney borrowed, to be repaid with interest, according to the specific terms and conditions of the loan.
Loan OfficerA person that "sells" loans, representing the lender to the borrower, and the borrower to the lender.
Loan OriginationHow a lender refers to the process of writing new loans.
Loan Origination FeesThe fee paid to your mortgage lender for processing the mortgage application. This fee is usually in the form of points. One point equals 1% of the mortgage amount.
Loan ServicingThe 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-InAn 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 PeriodThe amount of time the lender has guaranteed an interest rate to a borrower.
LOILetter of Intent
Lot DimLot Dimensions
Low-Down-Payment FeatureA feature of a mortgage, usually a fixed-rate mortgage that helps you buy a home with as little as a 3% down payment.
LTVLoan to Value Ratio