L.T.V. (LOAN-TO-VALUE RATIO)The ratio of the loan to the lending value of a property, expressed as a percentage.
LAND ACQUISITION LOANLoan advanced to acquire land as opposed to improving land or buildings.
LAND CONTRACTA contract drawn between a buyer and seller for the sale of property.
LAND DEVELOPMENT LOANLoan advanced for the purpose of developing raw land for residential and related uses.
LAND TRANSFER TAXA fee paid to the government for the transferring of property from seller to buyer.
LEASEHOLDA type of interest in a property that is certain only for a specified period of time granted by contract.
LEASEHOLD APPRAISALA method of estimating the value of a leasehold property.
LEASEHOLD MORTGAGEA mortgage given by a lessee on the security of the leasehold interest in the land.
LEGAL DESCRIPTIONA written description by which property can be definitely located, and which is acceptable for registration in a land registry system.
LEGAL MORTGAGEA transfer of a legal estate or interest in property for the purpose of securing the repayment of a debt.
LENDING VALUEAn independent appraiser’s value interpreted by the lender as to the worth of a property in the current market given a reasonable time period to sell the property.
LESSEETenant under a lease.
LESSEE ‘S INTERESTThe market value of property less the value of the lessor’s interest. The present worth of the annual advantage, if any, accruing to the lessee by reason of the contract rent being less than the economic rent.
LESSORThe person who grants use of the property under lease to a tenant.
LETTER OF COMMITMENTLetter written by the lender containing the amount of the loan, specified interest rate, term of loan, and specific conditions.
LETTER OF CREDITLetter issued by a bank or other lending institution promising payment to a third party in accordance with the terms of the agreement. Letters of credit may be used in situations where a deposit is required or a security, e.g. Where a builder is about to sign a contract and has to put up security that the job will be finished; or a security deposit under a long term lease.
LEVERAGEUpside leverage in real estate occurs when the yield or net return on property exceeds debt service for a loan. Downside or reverse leverage occurs when the debt service is greater thanthe net return on investment.
LIENA legal claim against a property for money owed; a lien may be filed by a supplier or a subcontractor who has provided labour or materials but has not been paid; a lien must be properly file by a claimant; it has limited life, prescribed by statute that varies from province to province; if the lien holder takes action within the prescribed time, the owner may be obliged to pay the amount claimed by the lien holder; the lien holder may force the sale of a property to pay off the debt.
LIEN HOLD BACKA percentage of the contract price or estimated cost of work to be done which is held back from the mortgage advance.
LINE OF CREDITA maximum credit limit allowed by a bank to a borrower, as long as the borrower maintains an acceptable balance on account or has a good credit rating. The credit line will vary from time to time according to the changing circumstances of the borrower or the bank.
LIS PENDENSA legal document giving notice that an action or proceeding is pending in the courts which affects the title to the designated property.
LISTING AGREEMENTLegal agreement between the listing broker and seller, setting out the services to be rendered, describing the property for sale and stating the terms of payment; a commission is generally payable to the broker upon closing.
LIST (ASKING) PRICEPrice placed on the property for sale by the seller.
LOAN COVERAGEThe ratio of net operating income to debt service - in general loan coverage of 1.3 to considered adequate for a loan to value ratio of 75%.
LOAN FEEA charge for making a loan in addition to the interest charged to the borrower.
LOAN LOSS RESERVEA reserve shown on a balance sheet of a real estate company as provision for any future losses in assets.
LOAN ORIGINATIONAnalysis of loan applications from prospective purchasers to determine if they meet with requirements and if so, the lender will issue a commitment letter.
LOAN PORTFOLIO TURNOVERThe average length of time required for the turnover of mortgage loans, i.e. until maturity.
LOAN PROCESSINGUpon application and approval of a loan, the lender has to go through a fairly standard procedure to finalize and disburse the loan such as the setting up of files, ordering of credit reports, verification of employment, bank accounts, etc.
LOAN RATIOThe ratio of the principal amount of the loan to the lending value of the property.
LOAN-TO-VALUE RATIOThe ratio of the loan to the lending value of a property expressed as a percentage.
LOCK-IN CLAUSEA clause which restricts prepayment of a loan during a specified period of the whole term of the mortgage. This ensures that the lender receives a stipulated return on his investment and discourages "shopping around" for another loan.
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