Jargon Buster
Land certificate
Proof of ownership of a property with no mortgage on it.
It details the boundaries of the property and the covenants
affecting it.
Land registry
This is a government department which registers and all
the details of any land transactions and issues to do
with ownership of property in England and Wales.
Land registry certificate
This is a copy of the property entry in the land
registry database concerning a property transaction or
ownership.
Land registry fees
A charge incurred when buying a home for registering
the title of a property under your name. This is usually
dealt with by your solicitor / conveyancer.
Late charge
A fee a lender imposes on a borrower when the borrower
does not make a payment on time.
Late payment
A payment a lender receives after the due date has passed.
Lease
The lease is a document which contains the rights and
the covenants (rules) on behalf of both the landlord and
the tenant which regulate the use of the property.
Leasehold
When you buy a leasehold property, essentially you are
buying nothing more than the right to occupy a building
for a given length of time. You will have to pay ground
rent and maintenance in addition to a one-off payment
that buys ownership of the lease until sold or it runs
out. The amount of alterations you can make to the property
varies accordance with the lease and you may well have
other conditions imposed upon you by the landlord. As
a rule, look to buy a lease with over 50 years remaining.
Legal charge
A document securing the debt on the property, for example,
the monies the buyer borrows from the Bank or Building
Society to purchase a property.
Legal fees
The charges paid to a solicitor. Lender The building
society, bank, mortgage company or mortgage broker with
whom you take out your mortgage or other loan.
Lender's arrangement fees
Fee for arranging a loan passed on to the buyer by lender.
Lenders basic valuation The lenders assessment of the
value of a property before authorising any loan against
it.
Lenders fees
Administration costs incurred by a lender to secure a
loan, paid by the applicant.
Lender's legal fees
Fees incurred by the lender when arranging a mortgage
passed on to the buyer.
Lender's risk fee
A payment to a lender for an insurance policy for the
lender's benefit when they lend above a certain percentage
of the property value. The policy covers the risk of selling
a repossessed property at a loss. (Also sometimes called
a higher lending fee or mortgage indemnity premium)
Lessee
The individual or company to whom a lease is granted.
Lessor
The individual or company who grants a lease.
Let
The process of renting out all or part of your property
to someone else.
Letting agent
A property agent who can help landlords locate suitable
properties for purchase, and who finds tenants to occupy
those properties and manages the rental process which
follows.
Letting insurance
An insurance the landlord might take out to protect his
or her possessions in the rented home.
Level term assurance
Life assurance that pays out a set amount throughout the
entire agreement if you die during the term.
Liabilities
Basically, liabilities are debts that you have and the
regular outgoing payments that you make.The reason you
must show your bank statements is usually to help the
underwriters identify anything in your current expenditure
that may impinge upon your ability to repay the loan.
They want to know about any other mortgages, debts, credit
cards, HP agreements, loans, overdraft facilities, maintenance
and court orders. You will normally have to show three
to six months worth of bank statements to help demonstrate
that the figures you provide them with are accurate.
Licensed conveyancer
Alternative to solicitors. Specialising in the legal side
of buying and selling property.
Life assurance
An insurance policy that pays a lump sum on death. Often
taken out with a mortgage to provide money for the loan
to be repaid if the borrower dies during the term.
Lifetime cap
A limit on how high the interest rate on a variable rate
mortgage can rise over the lifetime of the loan.
Limited partnership
Real estate syndicates and other investment groups use
this type of ownership. A general partner makes the group's
investment decisions, oversees the investment and is principally
liable for any losses.
Loan application
The first step toward in submitting a home loan requires
the borrower to itemize basic financial information.
Loan application fee
A fee charged by lenders to for making a loan application.
Loan commitment
A promise by a lender or other financial institution to
make or insure a loan for a specified amount and on specific
terms.
Loan consolidation
When one large loan is taken out to pay off a variety
of smaller loans held with different providers. A mortgage
can be used for this purpose and in some cases can work
out cheaper as mortgage rates tend to be cheaper than
personal loan interest rates.
Loan to Value Ratio (LTV)
The ratio of your mortgage to the market value of your
property. Expressed as a percentage. For example, if you
have a mortgage of £95,000 on a property worth £100,000,
the loan to value is 95%.
Local authority searches
A local authority search is a check with the local authorities
to establish if any new developments are planned in the
vicinity of the property you are buying and to check the
water drainage systems and other social infrastructure.
This can highlight any public works such as a new motorway,
waterworks or alterations to road systems, as well as
anything else that is has had permission to take place
immediately adjacent to the property. The local search
will also tell you whether there are any planning restrictions
that may affect your intentions to renovate or extend
the property.
Lock in
Allows the borrower to be assured a given rate of interest
for a mortgage. This usually involves paying a fee to
the lender. Mortgage rates not "locked in" are subject
to changing market conditions.
Low start endowment
This is essentially the same as a low-cost endowment,
but premiums begin at a lower level and gradually increase
over a number of years - usually between five and ten.
The initial premium can be significantly lower than the
full premium, but never lower than half (which is a common
starting point). Premiums may, for example, increase from
50% to 100% of the final value by 20% per year for 5 years
or by 10% per year for ten years. This is another product
designed to make it easier to budget over the first few
years of home owning, when money is likely to be tighter
for many people. As with most products that work this
way, you generally have to pay for it in the long run.
Low start mortgage
This is like a repayment mortgage, but with a difference.
In the introductory period, only interest is paid back
to the lender and not any of the capital outstanding.
After this period, the repayments start in earnest. The
total amount of interest and repayments over the life
of the year are higher than with a normal repayment mortgage,
but this sacrifice can be worth it if you need to severely
restrict your outgoings during the low start period.
Low-cost endowment
Designed to accumulate the sum needed to pay after a given
period, usually for the purpose of paying off a mortgage.
However there are no guarantees and investors may have
to increase their premiums to build up enough to pay off
their mortgage.
Low-documentation loan
Mortgages that require only minimal verification of income
and assets. Low-start low-cost endowment Similar to a
low cost endowment, the difference being that premiums
are lower at the beginning of the loan and then rise in
the future. Once again, there are no guarantees.
Loyalty bonus
Incentive based schemes for existing mortgage holders.
Such as lower interest rates and discounted services.
LTV The ratio of your mortgage to the market value of
your property. Expressed as a percentage. For example,
if you have a mortgage of £95,000 on a property worth
£100,000, the loan to value is 95%.
