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Lease
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A legal document which outlines the responsibilities and parameters between a landlord and a tenant.
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Lease Assignment
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When a lessee (tenant) must leave his/her apartment prior to the end of the particular lease and he/she remains responsible for the duration of the term. In such an instance, the lessor (owner) will allow the lessee to assign the remaining term on the lease to a new tenant. However, in most situations like this, a prudent owner/landlord will keep the original tenant on the lease and thus responsible for the remainder of the term. Whether or not the owner/landlord allows the new tenant to remain in the apartment is strictly at the discretion of the owner/landlord.
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Lease purchase
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Assists low to moderate income homebuyers in purchasing a home by allowing them to lease a home with an option to buy; the rent payment is made up of the monthly rental payment plus an additional amount that is credited to an account for use as a down payment.
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Leasehold
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The limited interest in a property held by a tenant; primarily the right to inhabit it for a specified period of time. At the end of the lease, the property reverts to the owner or landlord.
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Leasehold interest
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The right to hold or use property for a fixed period of time at a given price, without transfer of ownership
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Lease-Purchase
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The lease purchase contract sets the closing date and provides remedies to the seller if the buyer defaults. (a type of delayed closing)
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Legal blemish
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Blemishes on a piece of property such as a zoning violation or fraudulent title claim.
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Legal description
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A geographical description identifying a parcel by government survey, metes and bounds, or lot numbers of a recorded plat including a description of any portion that is subject to an easement or reservation. A specific way of identifying and locating a piece of real estate that is acceptable to a court.
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Legal owner
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The legal owner has title to the property, although the title may actually carry no rights to the property other than as a lien.
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Lender
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A bank, savings institution or mortgage company that offers home loans.
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Letter of credit
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A commitment by a bank or other person that the issuer will honor drafts or other demands for payment upon full compliance with the conditions specified in the letter of credit. Letters of credit are often used in place of cash deposited with the landlord in satisfying the security deposit provisions of a lease.
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Letter of intent
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A preliminary agreement stating the proposed terms for a final contract
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Leverage
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The use of credit to finance a portion of the costs of purchasing or developing a real estate investment. Positive leverage occurs when the interest rate is lower than the capitalization rate or projected internal rate of return. Negative leverage occurs when the current return on equity is diminished by the employment of debt.
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Liabilities
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A borrower's debts and financial obligations.
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Liability insurance
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An insurance policy that protects owners against claims of negligence, personal injury or property damage.
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LIBOR
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Acronym for "London Interbank Offered Rate." An index used to determine interest rate changes for adjustable rate mortgages. Very popular index for interest only mortgage programs.
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LIBOR (London InterBank Offered Rate)
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The interest rate offered on Eurodollar deposits traded between banks, also called swaps
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Lien
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A legal claim against property that must be satisfied when the property is sold.
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Lien
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A claim or encumbrance against property used to secure a debt, a charge or the performance of some act
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Lien
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A claim laid by one person or company on the property of another as security for money owed.
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Lien waiver
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Waiver of a mechanic's lien rights that is often required before the general contractor can receive a draw under the payment provisions of a construction contract. It may also be required before the owner can receive a draw on a construction loan.
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Life cap
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Limits the amount a loan's interest rate can change during the mortgage term. For example, if the rate on an adjustable-rate mortgage begins at 4 percent and has a life cap of 6 percentage points, it can not go over 10 percent.
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Lifecycle
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The various developmental stages of a property: pre-development, development, leasing, operating and redevelopment (or rehab)
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Lifetime Payment Cap
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For an adjustable-rate mortgage (ARM), a limit on the amount payments can increase or decrease over the life of the mortgage.
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Lifetime Rate Cap
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A maximum interest rate or "ceiling" that may not be exceeded under any circumstances over the entire life of the loan.
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Like-kind property
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A term used in an exchange of property held for productive use in a trade or business or for investment. Unless cash is received, the tax consequences of the exchange are postponed pursuant to Section 1031 of the Internal Revenue Code.
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Limited partnership
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A type of partnership comprised of one or more general partners who manage the business and are personally liable for partnership debts, and one or more limited partners who contribute capital and share in profits but who take no part in running the business and incur no liability above the amount contributed
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Liquid assets
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Cash and all other assets that can be converted to cash relatively quickly. Liquid assets can include money in savings and checking accounts, money-market accounts and most CD's.
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Liquidity
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The ease with which assets can be converted to cash without loss in value
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Listing agreement
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An agreement between the owner of a property and a real estate broker giving the broker authorization to attempt to sell or lease the property at a certain price and terms in return for a commission, set fee or other form of compensation
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Listing(s)
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Brokers refer to available apartments as listings. These can be either sale or rental availabilities.
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Listing(s)
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Brokers refer to available apartments as listings. These can be either sale or rental availabilities.
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Loan
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Money borrowed that is usually repaid with interest.
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Loan application
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A document that details a borrower's income, debt and other obligations to determine credit worthiness. Also includes information on the subject property.
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Loan application fee
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A fee charged by lenders to cover expenses incidental to reviewing a loan application.
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Loan commitment
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A promise by a lender or other financial institution to make or insure a loan for a specified amount and on specific terms.
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Loan fraud
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purposely giving incorrect information on a loan application in order to better qualify for a loan; may result in civil liability or criminal penalties.
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Loan officer
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An official lending institution representative who is empowered to act on behalf of the lender within certain limits.
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Loan origination fee
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A fee charged by lenders to cover the direct costs of arranging the loan.
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Loan term
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The time set by a lender for a buyer to pay a mortgage. Most conforming loans have 30 or 15-year terms.
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Loan-to-value (LTV) ratio
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A percentage calculated by dividing the amount borrowed by the price or appraised value of the home to be purchased; the higher the LTV, the less cash a borrower is required to pay as down payment.
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Loan-to-value (LTV) ratio
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A percentage calculated by dividing the amount borrowed by the price or appraised value of the home to be purchased; the higher the LTV, the less cash a borrower is required to pay as down payment.
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Loan-to-value ratio (LTV)
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The ratio of the value of the loan principal divided by the property's appraised value
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Loan-to-value ratio (LTV)
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The ratio of the total loan amount to the value of the property. For lending purposes, the property value is equal to the purchase price or the appraised value, whichever is lower.
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Lock-box structure
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A structure whereby the rental or debt-service payments are sent directly from the tenant or mortgagor to the trustee
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Lock-in
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since interest rates can change frequently, many lenders offer an interest rate lock-in that guarantees a specific interest rate if the loan is closed within a specific time.
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Lock-in
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A lender's commitment to a borrower to guarantee (or "lock in") a specific interest rate for a limited amount of time.
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Lock-in period
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A period of time during which the borrower is guaranteed an agreed-upon interest rate, even if market rates rise. The longer the period, the higher the cost (in points) to the borrower.
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Lockout
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The period during which a loan may not be prepaid.
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Loft Space
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By definition, this term refers to space which has been converted from commercial usage to residential usage. This can include the conversion of office space, factory space or warehouse space. At present, there is a wave of conversion of downtown space from commercial office building space to residential loft or loft-like space. Some of the attributes of loft space may include high ceilings, open space, raw space, large windows, etc.
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Long-term lease
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In most markets, this refers to a lease whose term is at least three years from initial signing to the date of expiration or renewal.
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Loss mitigation
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a process to avoid foreclosure; the lender tries to help a borrower who has been unable to make loan payments and is in danger of defaulting on his or her loan
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Loss severity
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The percentage of principal lost when a loan is foreclosed
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Lot
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Each New York City parcel of land is divided into lots for purpose of identification
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Lot
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Generally one of several contiguous parcels of land making up a fractional part or subdivision of a block, the boundaries of which are shown on recorded maps and plats
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Low-documentation loan
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A home loan that requires only minimal verification of income and assets.
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Low-rise
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A building with fewer than four stories above ground level
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LTV (loan-to-value ratio)
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The ratio of the total loan amount to the value of the property. For lending purposes, the property value is equal to the purchase price or the appraised value, whichever is lower.
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Lump-sum contract
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A type of construction contract requiring the general contractor to complete a building or project for a fixed cost normally established by competitive bidding. The contractor absorbs any loss or retains any profit.
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