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Land Acquisition Loan [back to top]
A loan advanced to acquire land as opposed to one acquired for land or buildings improvements.
Land Contract [back to top]
A contract drawn between a seller and buyer for the sale of property.
Land Development Loan [back to top]
A loan advanced for the purpose of residential land development.
Land Transfer Tax [back to top]
A tax payable to the crown (usually the provincial government) by the purchaser upon the transfer of title from a seller.
Leasehold [back to top]
A type of interest in a property that is granted for a specified period of time as stated in the contract.
Leasehold Appraisal [back to top]
A method of estimating the value of leasehold property.
Leasehold Mortgage [back to top]
A mortgage given by a lessee on the security of the leasehold interest in the land.
Legal Description [back to top]
A written description by which property can be locatedfor purposes pf registration in a land registry system.
Legal Mortgage [back to top]
The transfer of a legal estate or interest in property for the purpose of securing the repayment of a debt.
Lending Value [back to top]
An independent appraiser's value interpreted by the lender as to the worth of a property in the current market given a reasonable time period to sell the property.
Lessee [back to top]
The tenant under a lease.
Lessee Interest [back to top]
The market value of property less the value of the leassor's interest.
Lessor [back to top]
The person who grants the use of the property under lease to a tenant.
Letter of Commitment [back to top]
A letter written by a lender that states the amount of the loan, specified interest rate, term of loan, and other specific conditions.
Letter of Credit [back to top]
The letter issued by a bank or lending institution that promises payment to a third party in accordance with the terms of the agreement. For example, letters of credit may be used in situations where a deposit is required or as security.
Leverage [back to top]
In real estate terms, upside leverage occurs when the yield or net return on property exceeds the debt service for a loan. Conversly, downside leverage occurs when the debt service is greater than the net return on investment.
Lien [back to top]
A lien is a claim made against a property for the payment of a debt or obligation related to the property or its owners.
Lien Hold Back [back to top]
A percentage of the contract price, or estimated cost of work to be done, that is held back from a mortgage advance.
Line of Credit [back to top]
A maximum credit limit allowed by a bank to a borrower, provided the borrower maintains an acceptable balance on account or has a good credit rating (the line of credit may vary according to the changing circumstances of the borrower or the bank).
Loan Coverage [back to top]
The ratio of net operating income to debt service; in general, a loan coverage of 1.3 to considered to be adequate for a loan to value ratio of 75%.
Loan Fee [back to top]
A charge for making a loan in addition to the interest charged to the borrower.
Loan Loss Reserve [back to top]
A reserve shown on a balance sheet as provision for any future losses in assets.
Loan Origination [back to top]
Analysis of loan applications from prospective purchasers to determine if they meet with requirements upon which the lender may issue a commitment letter.
Loan Portfolio Turnover [back to top]
The average length of time required for the turnover of mortgage loans until maturity.
Loan Processing [back to top]
The process a lender goes through upon application and approval of a loan; e.g. the procedures completed to finalize and disburse the loan such as the setting up of files, ordering of credit reports, verification of employment, bank accounts etc.
Loan Ratio [back to top]
The ratio of the principal amount of the mortgage loan to the lending value of the property.
Loan-to-Value Ratio [back to top]
The percentage of the value of a property for which a mortgage is required. The LTV ratio is used to determine whether or not default mortgage insurance is required, and, if so, the cost of mortgage insurance. For example, given a property value is $250,000, and the down payment available is $25,000, the required mortgage is $225,000; therefore, the LTV is $250,000 / $225,000 or 90%.
Lock-In Clause [back to top]
A clause that restricts prepayment of a loan during a specified period of the mortgage.