Who's ready to buy their DREAM home? The mortgage process may seem intimidating to a first-time home buyer, but our bank at the Lake of the Ozarks is here to tell you it DOESN'T have to be. Know your facts! Keep reading for the meaning behind a few commonly used mortgage terms. This is Part 8 in a monthly Common Mortgage Terms blog series we've been doing. Each month we teach our customers what these important terms mean. To stay tuned into this monthly blog series, be sure to follow us on our Facebook page HERE.
Joint Tenancy
An undivided interest in property, taken by two or more joint tenants. Upon the death of a joint tenant, the interest passes to the surviving joint tenants, rather than to the heirs of the deceased.
Judgment
Final determination by a court of the rights and claims of the parties to an action.
Late Charge
The penalty a borrower must pay when a payment is made after the due date.
Lender Paid Mortgage Insurance (LPMI)
Insurance in which the cost of the mortgage insurance is included in the interest rate. Although the interest rate is slightly higher with LPMI, this option usually results in a lower monthly payment and a larger tax deduction*. *Consult your tax advisor
Lien
A legal claim or attachment against property as security for payment of an obligation.
Lifetime Cap
A provision of an ARM that limits the total increase in interest rates over the life of the loan.
Liquidity
The ability to readily convert assets or investments to cash.
Loan-To-Value Ratio
The ratio between the amount of a given mortgage loan and the lower of sales price or appraised value.
Lock-in Period
A specified number of days before loan closing during which the range of rates available to a borrower is protected from financial market fluctuations in interest rates. Locking does not guarantee what specific rate will apply at closing, as that depends on specific transaction characteristics and the borrower's credit profile.
London Interbank Offered Rate (LIBOR)
The rate at which banks in the foreign market lend dollars to one another. LIBOR varies by deposit maturity. A common interest rate index; one of the most valid barometers of the international cost of money.
Loss Payable Clause
An insurance policy provision for payment of a claim to someone other than the insured, who holds an insurable interest in the insured property.
Now that you're more informed on what some of the commonly used mortgage terms mean, keep it up! Follow us on our social media channels listed below to stay up to date on our latest part in this blog series. Have any questions? Give us a call at the phone number listed below.
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