Glossary

A legal claim against property that must be satisfied when the property is sold. A lien is a defect on the title and needs to be settled before transfer of ownership. A lien release is a written report of the settlement of a lien and is recorded in the public record as evidence of payment.

A limit on the range interest rates can increase or decrease over the life of an adjustable-rate mortgage (ARM).

The capability of an asset to be readily converted into cash.

A percentage calculated by dividing the amount borrowed by the price or appraised value of the home to be purchased; the higher the LTV, the less cash a borrower is required to pay as down payment.

The guarantee of a specific interest rate and/or points for a specific period of time. Some lenders will charge a fee for locking in an interest rate.