L – First Colony
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mortgage glossary

A B C D E F G H I J L M N O P R S T U V

Lien

The lender’s right to claim the borrower’s property in the event the borrower defaults. If there is more than one lien, the claim of the lender holding the first lien will be satisfied before the claim of the lender holding the second lien, which in turn will be satisfied before the claim of a lender holding a third lien, etc.

Loan amount

The amount the borrower promises to repay, as set forth in the mortgage contract.

Loan officer

A person who serves as an intermediary between lending institutions and borrowers. They solicit loans, represent creditors to borrowers, and represent borrowers to creditors.

Loan-to-value ratio

The loan amount divided by the lesser of the selling price or the appraised value.

Lock

An option exercised by the borrower, at the time of the loan application or later, to “lock in” the rates prevailing in the market at that time. The lender and borrower are committed to those terms, regardless of what happens between that point and the closing date.

Lock period

The number of days for which any lock commitment is considered valid. Normal lock agreements can be found in 15, 30, 45, 60, and 90 day periods.