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%.
