Texas Home Loans
Home Mortgages | Mortgage Types | Mortgage Process | Mortgage Terms | APPLY NOW
Texas Home Mortgages

Mortgage / Loan Terms

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

L

Laches

An unreasonable delay by a party making a claim or bringing an action, so that the rights of said party are waived. Laches are not controlled by a statute of limitations.

Landowner's Royalty

In oil and gas leases, the portion of the value of each barrel of oil, which goes to the property owner.

Land Residual Technique

An appraisal technique by which land value is determined by first determining the net return attributable to the building only, and deducting it from the total return to the property (may be estimated), the residual amount is capitalized to find the land value. The building value may be determined by construction costs (new building), depreciated construction costs (it only a few years old), or estimated present construction costs (if an older building).

Late Charge

A penalty for failure to pay an installment payment on time. Usually not allowed as interest for tax deductions. May or may not be included as usury. If not, the amount of late charge is either set by statute or must be "reasonable."

Lateral Support

The right of a landowner to the natural support of his land by adjoining land. The adjoining owner has the duty not to change his land (such as lowering it) so as to cause this support to be weakened or removed.

Lease With Option To Purchase

A lease under which the lessee has the right to purchase the property. The price and terms of the purchase must be set forth for the option to be valid. The option may run for the length of the lease or only for a portion of the lease period. Legal Description: A description by which property can be definitely located by reference to surveys or recorded maps. Sometimes referred to simply as the legal.

Legal Owner

The term has come to be used as a technical difference from the equitable owner, and not as opposed to an illegal owner. The legal owner has title to the property, although the title may actually carry no rights to the property other than a lien.

Lessee's Interest

In appraising the value of a lessees interest to determine the value of a potential sublease of assignment (sale) of the lease, the value is the market value of the property, less the interest of the lessor. The lessor's interest would be largely determined by the ratio of the return on the lease to the market value without the lease. Lien: A recorded document, which claims an interest in real property as security for a debt owed. Such liability may be created by contract, such as a deed of trust, or by a court judgment.

Lien Waiver (waiver Of Liens)

For our purposes, a waiver of mechanic's lien rights, signed by subcontractors so that the owner or general contractor can receive a draw on a construction loan.

Liquidated Damages

A definite amount of damages, set forth in a contract, to be paid by the party breaching the contract. A predetermined estimate of actual damages from a breach.

Lis Pendens

Legal notice that a lawsuit is pending. Also called a notice of action.

Loan Constant

The yearly percentage of interest which remains the same over the life of an amortized loan, based on the monthly payment in relation to the principal originally loaned. For example: A $1000 loan at 9% interest for 20 years can be amortized at $9.00 per month. The constant interest rate is figured by finding one year's payments ($9.00 x 12 months = $108,00), and expressing this amount as a percentage of the principal originally borrowed (10.8% of $1000).

Loan Policy

A title insurance policy insuring a mortgagee, or beneficiary under a deed of trust, against loss caused by invalid title in the borrower, or loss caused by invalid title in the borrower, or loss of priority of the mortgage or deed of trust.

Loan Ratio

The ratio, expressed as a percentage, of the amount of a loan to the value or selling price of real property. Usually, the higher the percentage, the greater the interest charged. Maximum percentages for banks, savings and loans, or government insured loans, is set by statute.

Loan to Value Ratio

The ratio of the mortgage loan's principal to the property's appraised value or its sales price, whichever is lower.

Long Term Capital Gain

Gain on the sale of a capital asset, which has been held for a specified time or longer. Long term capital gain is taxed at a special rate and not as ordinary income.

M

Marketable Title

Title, which can be readily marketed (sold) to a reasonably prudent purchaser aware of the facts and their legal meaning concerning liens and encumbrances.

Market Value

The highest price a willing buyer would pay and a willing seller accept, both being fully informed, and the property exposed for a reasonable period of time. The market value may be different from the price a property can actually be sold for at a given time (market price),

Market Value Approach

Appraising the value of a property by comparing the price of similar properties (comparables) recently sold. The degree of similarity of the properties and circumstances of the sale are the important characteristics to consider,

Maturity

(1) Termination period of a note. For example: A 30-year mortgage has maturity of 30 years. (2) In sales law, the date a note becomes due.

Mechanic's Lien

A lien created by statute for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements.

Merger Of Title

A lesser interest in real property being merged (absorbed) into a greater interest. For example: A lessee purchases the property being leased. The interest as a lessee is merged into the interest as an owner, thus ending the leasehold interest.

Metes and Bounds

A form of land description in which boundaries are described by courses, directions, distances and monuments.

Mile

A linear measurement equal to 5280 feet on land and 6076 feet across water (nautical mile).

Money Market Mutual

Funds which invest in the "Money Market," a variety of interest bearing securities such as treasury bills and bank certificates of deposit. None is invested directly into real property or real property securities.

Month To Month Tenancy

A tenancy where no written lease is involved, rent being paid monthly. Some obligations as to notice of moving or eviction may exist by statute.

Mortgage

(1) To hypothecate as security, real property for the payment of a debt. The borrower (mortgagor) retains possession and use of the property. (2) The instrument by which real estate is hypothecated as security for the repayment of a loan.

Mortgage Banker

A company providing mortgage financing with its own funds rather than simply bringing together lender and borrower, as does a mortgage broker. Although the mortgage banker used its own funds, these funds are generally borrowed and the financing is either short term or, it long term, the mortgages are sold to investors (many times insurance companies) within a short time.

Mortgage Bonds

Bonds issued by corporations, which offer first mortgages on real property of the corporation as security for the payment of the bonds.

Mortgage Broker

One who, for a fee, brings together a borrower and 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. Also called a loan broker.

Mortgage Company

A company authorized to service real estate loans, charging a fee for this service.

Mortgagee

The party lending the money and receiving the mortgage. Some states treat the mortgagee as the "legal" owner, entitled to rents from the property. Other states treat the mortgagee as a secured creditor, the mortgagor being the owner. The latter is the more modern and accepted view.

Mortgage Insurance

Insurance written by a private mortgage insurance company (referred to as an 'PIC') protecting the mortgage lender against loss incurred by a mortgage default, thus enabling the lender to lend a higher percentage of the sale price. The Federal Government writes this form of insurance through the FHA and the VA.

Mortgage Life Insurance

A term life insurance policy for the amount of the declining balance of a loan secured by a mortgage or deed of trust. The beneficiary under the policy is the mortgagee. In the event of death (some policies also cover disability) of the insured (mortgagor), the mortgage is paid in full.

Mortgage Servicing

Controlling the necessary duties of a mortgagee, such as collecting payments, releasing the lien upon payment in full, foreclosing if in default, and making sure the taxes are paid, insurance is in force, etc. The lender or company acting for the lender, for a servicing fee, may do servicing.

Mutual Savings Bank

An institution owned by its depositors, as evidenced by certificates of deposit rather than stock. These institutions are active in long-term real estate financing, as opposed to commercial banks, which concentrates more on short-term loans.

 
About Us | Contact Us | Texas Home Loans

© 2003-2008 Texas Home Lending
All Rights Reserved - Privacy
Texas Home Mortgage Loan Lending Information