Real Estate Glossary

lease option
A lease wherein a tenant has the right to purchase the property under certain conditions such as a price and a time frame.
Holding the title to a property for a recorded long-term duration. Not a permanent ownership.
Leasehold FA
Holding the title to a property for a recorded long-term duration with the option of purchasing the lease to convert the property to fee simple ownership.
When used as an adjective, leeward means on the side sheltered from the wind, and windward means to be on the side facing the wind. In Hawaii, leeward also refers to a side of the island that is characteristically more dry. Hawaii trade winds blow from the northeast to the southwest and deposit rainfall as they pass over the mountains. Therefore Leeward is the south and west facing sides and Windward is the north and eastern facing sides.
A financial obligation, or encumbrance, with respect to a property, such as a mortgage. The lien must be paid off when the property is sold.
line of credit
A bank or other financial institution grants credit for a certain amount of money and a certain amount of time to a specified borrower.
liquid asset
An asset that is easily converted into cash.
loan origination fee
A fee charged by a lender to cover the administrative costs of processing the loan. This fee is usually calculated as a percentage of the loan amount and expressed as points.
loan-to-value ratio
A loan amount that is based on the value of a property being pledged as collateral. This amount is based on a percentage of the property's value. For example, a 60% loan to value ratio on a $100,000 property would be $60,000.
lock-in clause
The borrower may not pay back any of the principal balance on a loan before the time specified in the clause.