Glossary of Mortgage Terms

A land contract is a seller-financed deal in which the buyer pays the property owner directly instead of going through a bank. The seller keeps legal title to the property until the full purchase price is paid.

A land survey is a professional way to measure and map the boundaries, size, and physical features of a piece of land. It is used to set legal property lines and help with real estate deals.

A lease option is a rent-to-own agreement that gives you the right, but not the obligation, to buy a home you're renting at a price you and the seller agree on upfront.

A lien is a legal claim on a piece of property made by a creditor or government agency. It gives them the right to collect on an unpaid debt before the property can be sold or given to someone else.

A life estate is a legal agreement that lets a homeowner give their property to a chosen heir after they die, but they can still live in and use the home for the rest of their life.

With a limited cash-out refinance, you get a new loan that pays off your current mortgage. The new loan may also give you a small amount of cash back, usually no more than 1% of the new loan balance or $2,000.

A loan modification is a permanent change to the terms of your mortgage that can lower your monthly payment and help you avoid losing your home.

The loan principal is the amount you borrow from a lender. It's the part of your debt that gets smaller with each payment you make toward the original balance.

A loan term is the total length of time a borrower has to repay a mortgage, and it directly shapes monthly payments, total interest costs, and how fast you build equity in your home.

The loan-to-value ratio (LTV) is a percentage that lenders use to measure risk and set loan terms. It compares the amount you borrow on a mortgage to the appraised value of the property.