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Land Registry

Property ownership record. The mortgage is registered in a central register at HM land registry.

Land Registry Fees

This is a fee payable to the land registry to change an entry in their records following a transaction involving registered land. This can be following a change of ownership or just for swapping mortgages. See fee, arrangement fee, fees added to loan, stamp duty, valuation fee.

Landlord's Reference

A reference from the previous landlord regarding the conduct of the tenant and whether rent has been paid promptly.

Late Charge

This is when a lender charges a fee for paying the mortgage late Late Payment top A payment a lender receives after the due date has passed.

Leasehold

The land on which the house is built is not owned directly by the property purchaser and is held under a lease for a fixed period.

Legal Charge

The means by which lenders enforce their rights to a property, and are recorded at the land registry. Various different types of legal charge exist and the type used will vary from lender to lender. Building societies tend to use a charge for the specific amount that they have lent. Banks tend to use an all monies charge, allowing them to free equity in a property if it is owned by them. This may allow them to recover overdrafts and other loans if they have granted more than just a mortgage. A primary mortgage will normally be secured by a first charge. Building societies are allowed to lend only if they have a first charge on a property. Second charges may be granted on a property if additional money has been borrowed against it.

Legal Mortgage Fee

The fee charged by solicitors acting for the lender in creating their legal charge over the property.

Lender

An body which offers mortgage products.

Lender's Arrangement Fees

This is a fee for arranging a loan charged to the buyer by the lender.

Lenders Fees

Designed to cover costs incurred by the lender to secure the loan. This is paid by the borrower.

Lessee

Person to whom the lease is granted. Lessor top An individual or company who grant a lease.

Liabilities

These are debts and outgoing payments that you are legally responsible to pay.

Libor

This is the london interbank offered rate and is the rate at which banks notionally buy and sell money to each other. It varies daily and is closely linked to base rate. The relationship of libor to base rate can give an indication of the possible future direction of base rates. If libor is significantly above base rate it indicates that the markets believes interest rates are about to increase. If it is significantly below, the reverse is true. The key libor rate is 3 month libor, however rates are also quoted for one, six and twelve month periods. A mortgage linked to libor will be charged at a given margin over the interbank rate (typically 1 to 2%) and is likely to be reset quarterly. Consequently the libor rate gives the customer the opportunity to pay a rate closer to the true cost of money. In a low interest rate environment they are likely to result in lower overall payments but will be more expensive in periods of higher interest rates.

Life Company

A life assurance company.

Life Insurance

This policy pays upon the death of the insured, usually referred to as assurance.

Loan

The amount to be borrowed. See also consumer credit act:.

Loan Application

This is a form you fill out to apply for a loan.

Loan Application Fee

Lenders charge for a loan application.

Loan Authority Search Fee

This is the fee payable for the local authority search.

Loan Consolidation

This is a larger loan taken out to pay of existing credit commitments usually to reduce the monthly cost. Loan Illustration top A quotation given to show a mortgage set up costs and the amount charged per month.

Loan To Value Ratio

This is the ratio of the loan amount to the property value expressed as a percentage. E.g. If a borrower is seeking a loan of £60,000 on a property worth £120,000 it has a 50% loan to value rate. If the loan were £90,000, the LTV would be 75%. The higher the loan to value the greater the lender's perceived risk. Lenders will be more cautious in underwriting high loan to value loans. Loans above normal lending LTV ratios may require additional security.

Local Authority Search

This a search of local authority records to confirm the status of the property. Local authority searches should reveal any proposed changes in the area, the details of the planning permissions for the house and whether any enforcement notices have been served by the local authority.

Low Cost Endowment

This is the most common form of endowment policy used to repay a mortgage. It is a mix of full endowment and term assurance designed to provide full life cover in the event of death during the loan period. When investment returns are high it should also provide sufficient funds to repay the loan at the end of the term and ideally provide the borrower with a tax free cash surplus. It is not guaranteed to pay off the loan and that any shortfall will have to be made up by the borrower.

Low Start (Premiums)

A way of paying an endowment policy which allows the level of premiums payable to start at a low level and build up over a period of time (normally the first five years). The total amount payable under a low-start policy will exceed those payable under a normal contribution plan to compensate for the loss of investment growth on the reduced payments in the early years.

Loyalty Bonus

A extra bonus (usually by way of a temporary reduction in interest) payable for maintaining a satisfactory account with a lender for a period of years. Alternatively, loyalty bonuses may be offered to existing customers who return to the lender for a new mortgage. In which case the bonus may be dealt with by usually reducing the set-up costs of the new loan or a lump sum payable upon completion.

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