Sullivan Properties

Real Estate Glossary

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lease option
A lease wherein a tenant has the right to purchase the property under certain conditions such as a price and a time frame.


leasehold
Holding the title to a property for a recorded long-term duration. Not a permanent ownership.


Leasehold FA
Holding the title to a property for a recorded long-term duration with the option of purchasing the lease to convert the property to fee simple ownership.


lien
A financial obligation, or encumbrance, with respect to a property, such as a mortgage. The lien must be paid off when the property is sold.


line of credit
A bank or other financial institution grants credit for a certain amount of money and a certain amount of time to a specified borrower.


liquid asset
An asset that is easily converted into cash.


loan origination fee
A fee charged by a lender to cover the administrative costs of processing the loan. This fee is usually calculated as a percentage of the loan amount and expressed as points.


loan-to-value ratio
A loan amount that is based on the value of a property being pledged as collateral. This amount is based on a percentage of the property’s value. For example, a 60% loan to value ratio on a $100,000 property would be $60,000.


lock-in clause
The borrower may not pay back any of the principal balance on a loan before the time specified in the clause.