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Welcome to the Finance glossary, we have made this glossary to make you more comfortable in finding and understanding the finance terms. This is brought to you by the loan uk .
Use the A-Z alphabetical list to find definitions of key finance terms.Our aim is to provide the mostcomprehensive glossary of UK financial terms on the internet
Finance Terminology - L
Land Registry
A record of property, ownership and the mortgage is registered in a central register at HM land registry.
Land Registry Fees
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 a change of mortgage. See fee, arrangement fee, fees added to loan, booking fee, conveyancing fee, IGP, stamp duty and valuation fee.
Landlord's Reference
This is a reference from the previous landlord regarding the general conduct of the tenant and whether rent has been paid promptly.
Late Charge
A fee the lender imposes for receiving payments late.
Late Payment
A payment a lender receives after the due date has passed.
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, and 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
The fee charged by the solicitors acting for the lender in creating their legal charge over the property.
Lender
An organisation which offers mortgage products.
Lender's Arrangement Fees
Fee for arranging a loan passed on by the buyer to 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
An individual or company who grant a lease.
Liabilities
Debts and outgoing payments that you are legally responsible to pay.
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. 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
A policy payable upon the death of the insured, usually referred to as assurance.
Loan
The amount to be borrowed. See also: consumer credit act.
Loan Application
Form you fill out to apply for a loan.
Loan Application Fee
Lenders fee for a loan application.
Loan Authority Search Fee
This is the fee payable for the local authority search.
Loan Consolidation
A large loan is taken to help pay for smaller loans held elsewhere.
Loan Illustration
Is the 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.
Low Cost Endowment
Is 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.
Loan To Value Ratio (LTV)
This 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.
Leverage
Term for gearing in the U.S., the ratio of a company's debts to its assets.
Leveraged buyout
Purchase of a company by an institution using a high proportion of debt. A type of Management Buy-Out (MBO).
Liabilities
The accounting term for what a company owes (all cliams against a company).
Limit order
An order of instructions that an investor gives to his broker, which sets out the limits that he/she is prepared to pay for investments.
Limited-life trust
A trust which has been set up for a limited period, after which it will be wound up.
Liquidation
The process of ending the existence of a company. A company will go into liquidation if it is unable to pay its debts. In this situation the company's assets will be sold in order to pay off its debts.
Liquidity
Liquidity describes the ease with which an asset can be converted into cash immediately. A liquid market is one where there are many buyers and seller and it is easy to sell your investments. For example, the shares on the FTSE 100 index are very liquid while shares on the Alternative Investment Market are not.
Listed company
A listed company is one whose shares are included in the Official List of Securities and are dealt with by members of the Stock Exchange.
Loan stock
Long-term debt issued by a company in order to raise capital for which interest is paid.
London Interbank Offer Rate (Libor)
The London Inter-Bank Offer Rate is the rate of interest which applies to the wholesale money markets lending between London banks.
London International Financial Futures and Options Exchange (Liffe)
LIFFE allows investors and business enterprises to use financial futures to speculate or to hedge against risks of movements in gilt prices, interest rates, foreign currency exchange rates, shares prices and bond prices.
Low-start mortgage
A mortgage that offers a low interest rate initially which then rises to the lender's standard variable rate after a set date agreed at the start of the mortgage.
Loan to value (LTV)
This is the ratio between the size of the loan you are seeking and the mortgage lenders valuation of the property.
London Stock Exchange (LSE)
The London Stock Exchange is a primary capital market in which companies and other institutions can raise funds by issuing shares or loan stock. However, it is more important as a secondary market for buying and selling existing securities. The Stock Exchange is also the market for dealings in government securities (gilts).
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