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Liquid Asset

A cash asset or an asset that is easily converted into cash.

Loan

A loan is a type of debt. All material things can be lent but this article focuses exclusively on monetary loans. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the ' and the '.

Loan amount

A sum of borrowed money (principal) that is generally repaid over time with interest.

Loan Application

A form used to apply for a mortgage loan that a borrower must complete in order to secure the loan. It has questions about the borrower’s income, assets and debts, plus some required disclosures.

Loan Approval

The lender agrees to make the loan to a borrower on a property. The approval should include, at a minimum, the interest rate, a summary of the terms of the loan and a date by which escrow must be closed.

Loan Broker

One, who for a fee, brings together a borrower and a lender, and handles the necessary applications for the borrower to obtain a loan against real property by giving a mortgage or deed of trust as security.

Loan commitment

A lender's agreement to advance money on specified terms after specified conditions are met. See commitment letter.

Loan fraud

Purposely giving incorrect information on a loan application in order to better qualify for a loan; may result in civil liability or criminal penalties.

Loan Modification

A Loan Modification is a permanent change in one or more of the terms of a mortgagor's loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford.

Loan Origination

The process by which a mortgage lender makes a home loan and records a mortgage against the borrower's real property as security for repayment of the loan.

Loan Workout

A series of steps taken by a lender with a borrower to resolve the problem of delinquent loan payments. Steps can include rescheduling loan payments into lower installments over a longer period of time so that the entire outstanding principal is eventually repaid.

Loan-to-Value (LTV) Ratio

The ratio of the total amount borrowed on a mortgage against a property compared to the appraised value of the property. For example, if you have an $70,000 1st mortgage on a home with an appraised value of $100,000, the LTV is 70% ($70,000 / $100,000 = 70%).

Lock-in

A written agreement in which the lender guarantees a specified loan program interest rate and points if a mortgage goes to closing within a set period of time. lock-in period The time period during which the lender has guaranteed an interest rate to a borrower.

Loss Mitigation

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.

LTV

Loan To Value (LTV): The Loan to Value is the percentage of what is owed against the property vs. what the properties fair market value is.

Margin

For an adjustable-rate mortgage (ARM) or home equity line of credit, the amount that is added to the index to establish the interest rate on each adjustment date, subject to any limitations on the interest rate change. The margin is static and will not change during the life of the loan.

Master Association

A homeowners' association in a large condominium or planned unit development (PUD) project that is made up of representatives from associations covering specific areas within the project. In effect, it is a "second-level" association that handles matters affecting the entire development, while the "first-level" associations handle matters affecting their particular portions of the project.

Maturity

The date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable. At the maturity of a 30-year loan the principal balance will be paid in full.

Maximum Financing

The maximum amount a lender will lend on a specific loan program

Maximum Rate

The maximum interest rate that can accrue on a variable rate loan.

Mechanics Lien Mortgages

A lien against real estate may be filed for an amount claimed to be due for labor or materials furnished for the construction of a building or other improvement upon the property.  Pending final determination of the owner's liability, the owner may discharge the lien by giving bond conditioned for the payment of any amount that may be found due to claimant with interest and costs.

Merged Credit Report

A credit report that contains information from more than one credit reporting agency. When the report is created, the information is compared for inconsistencies and duplicate entries. Any duplicates are combined to provide a summary of your credit.

Minimum Payment

The minimum amount that must be paid monthly on an account. On the HELOC product, the minimum payment is interest only during the draw period. On the Fixed Rate Second products, the minimum payment is principal and interest.

Modification

The act of changing any of the terms of the mortgage.

Money Market Account

A savings account that provides bank depositors with many of the advantages of a money market fund. Certain regulatory restrictions apply to the withdrawal of funds from a money market account.

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