Letters I-L

Mortgage Glossary

We have assembled these terms to help you to have a better understanding of mortgage financing terminology. Click on a first letter of the word you want to look up.

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

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Impound Account: An account established by a lender to collect a borrower's property tax and insurance payments when mortgage payments are PITI. See The Truth about Impound Accounts for more.
Income Property: Real estate that is owned for investment purposes and not used as the owner's residence.
Index: The financial instrument used as the foundation for determining future rates as adjustments are made to ARMs. There are several indexes that are used in the mortgage industry--T-Bill, LIBOR, Prime, COFI, and CODI.

View charts & tables showing the history of the different ARM Indexes used to set ARM loan rates.
Interest: A charge paid to a lender for the use of money.
Interest Only Payments: Control your cash flow with interest only loans. Available in both adjustable and fixed rate forms these loans allow you to have greater purchasing power, reduced monthly obligations and many more features not available with the traditional 30 year fixed principal and interest loan. Interest Only Loans can be tied to many Indexes (see 'Index' above).
See our Interest-only Payments page for more information.
Interim Financing: See Bridge Loan.
Initial Cap: See Cap Rates.

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Jumbo Mortgage: A mortgage larger than the maximum eligible for purchase or refinance by the two Federal agencies, Fannie Mae and Freddie Mac. Any loan amount over $417,000 is considered a jumbo mortgage.; See Conforming Loan.; - K -; Back to Top
No Terms Listed: - L - Back to Top
Land Contract: When the buyer agrees to make payments directly to the seller at pre-negotiated terms. The seller agrees to deed the property to the buyer upon completion of the agreement. The buyer becomes the owner of equity in this type of sale. (Also see Owner Financing)
Lien: A legal claim on a property used as security for a debt.
LIBOR Index: This popular ARM Mortgage Index is an abbreviation for the "London Interbank Offered Rate." LIBOR is the base interest rate paid on deposits between banks in the 'Eurodollar' market. A Eurodollar is a dollar deposited in a bank in a country where the currency is not the dollar. London is the center of the Euromarket (where Eurodollars are traded) in terms of volume. The LIBOR rate quoted in the Wall Street Journal is an average of rate quotes from five major banks: Bank of America, Barclays, Bank of Tokyo, Deutsche Bank and Swiss Bank.
Lifetime Cap: See Cap Rates.
Loan-To-Value Ratio: The relationship between the amount of the mortgage and property value, usually shown as a percentage and abbreviated LTV.
Loan Limits: For a comprehensive breakdown see National Conforming Loan Limits By County.

See Conforming Loan for more information.
Loan-To-Value Ratio: The relationship between the amount of the mortgage and property value, usually shown as a percentage and abbreviated LTV.

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