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land
registry
- A record of property, ownership and the mortgage
is registered in a central register at HM Land Registry.
land
registry fees
- 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 a change of mortgagee.
landlord's reference
- reference from the previous landlord regarding the
general conduct of the tenant and whether rent has been paid promptly.
large
town allowance
- additional portion of salary payable to an
employee to compensate for the additional expenses incurred as a result of
working in a major conurbation. In theory the payment is made to cover
either increased housing or commuting costs and is normally considered as
part of basic income when applying income mulitpliers.
leasehold
- the land on which the property 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 - it is recorded at the land registry. There are various
different types of legal charge 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 or subsequent charges may be granted on a property if
additional money has been borrowed against it.
legal mortgage fee
- fee charged by the solicitors acting for the
lender in creating their legal charge over the property.
lender
- An organisation which offers mortgage products.
LIBOR
- London Interbank Offered Rate is the rate at which
banks notionally buy and sell money to each other. It varies from day to day
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 money market
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.
libor-linked
- A mortgage linked to libor will be charged at a
given margin over the Interbank rate (typically 1 to 1.5%) and is likely to
be reset quarterly. LIBOR rates tend to be more volatile than variable
mortgage rates as the rate payable will change almost every quarter. They
offer 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
- policy payable upon the death of the insured,
usually referred to as assurance.
loan
- the amount to be borrowed. See also:
Consumer Credit Act for definition.
loan
illustration
- example of the monthly cost of a mortgage and
other expenses associated with the loan such as set-up costs.
loan to
value ratio
- is the ratio of the loan amount to the property
valuation expressed as a percentage. E.g. if a borrower is seeking a loan of
£20,000 on a property worth £40,000 it has a 50% loan to value rate. If the
loan were £30,000, 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
- 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 permission for the subject
property and whether any enforcement notices have been served by the local
authority.
loan
authority search fee
- fee payable for the local authority search.
low
cost endowment
- the most common form of endowment policy used to
repay a home loan. 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. If
investment returns are high enough 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 premium structure for a low cost
endowment or other investment policy which allows the level of premiums
payable to commence at a low level and build up over a period of time
(normally the first five years). The total premiums payable under a
low-start arrangement will exceed those payable under a normal contribution
structure to compensate for the loss of investment growth on the reduced
payments in the early years.
loyalty bonus
- a concessionary 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 way of a reduction in
the set-up costs of the new loan or a lump sum payable upon completion.
LTV
- loan to value ratio (LTV) - is the ratio of the
loan amount to the property valuation expressed as a percentage. E.g. if a
borrower is seeking a loan of £20,000 on a property worth £40,000 it has a
50% loan to value rate. If the loan were £30,000, 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.
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L
land registry
land registry fees
landlord's
reference
large town
allowance
leasehold
legal charge
legal mortgage
fee
lender
LIBOR
LIBOR-linked
life company
life insurance
loan
loan illustration
loan to value ratio
local authority
search
local authority
search fee
low cost endowment
low start
loyalty bonus
LTV
Introduction
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