Glossary of Mortgage Terms

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.

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.

Loss mitigation is the term for the options and strategies that a mortgage servicer gives a homeowner to help them avoid losing their home when they can't make their monthly payments anymore.

A low-income home loan is a type of mortgage that helps families with incomes below the area median income level buy a home. It has flexible credit, a lower down payment, and rules about who can get one based on their income.

A manufactured home is a factory-built dwelling constructed on a permanent steel chassis under federal HUD Code standards, then transported to a home site for installation.