A financial term used mainly by lenders to express the ratio of a loan to the value of the asset purchased using the loaned money or to the value of the asset serving as collateral on the loan. A...
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Loan Workout
An agreement between a lender and a delinquent borrower to either bring a loan back on track or resolve the delinquency in some other way. Workouts often include extensions of the payback period to...
Loan Origination
The process of creating a new loan, from application to evaluation to disbursal of funds.
Lien
A debt. In real estate, if a property has a lien against it, that property is serving as collateral for the debt in some form or fashion.
LIBOR-Index
The world’s most widely used benchmark for short-term interest rates. LIBOR stands for London Interbank Offered Rate. It is based on the US dollar, the euro, the pound sterling, the Japanese yen,...
Leverage
Using borrowed capital for an investment and expecting the profits made to be greater than the cost of the loan.
Lease-Purchase Option
A traditional rental agreement may include a first-refusal option for the tenant under certain circumstances. A lease-purchase may define a set time period within which the purchase may be made,...
Lease
The agreement between the owner of a property and a tenant (lessee) that defines how the property will be used by the tenant, for what period of time, and how the owner will be paid for that use....
Landlord
An individual who owns a rental property. Sometimes the term landlord is used to indicate a rental owner who actively manages their rental property, but the term includes both active and passive...
Land Trust
An agreement between two or more parties whereby one party (the trustee) agrees to hold ownership of a piece of real estate for the benefit of another party (the beneficiary).
