Finance terms starting with L

97 terms

Laddering Laddering is an investment strategy that calls for establishing a pattern of rolling maturity dates for a portfolio of fixed-income investments.
Lapse Termination of a policy due to non-payment of premiums.
Lapsed Policy A policy that has terminated for non-payment of premiums.
Large-capitalization (large-cap) stock The stock of companies with market capitalizations of $10 billion or more is known as large-cap stock.
Last trading day The last trading day is the final day on which an order to buy or sell an options contract or futures contract can be executed.
Late Charge The fee charged for delinquent payment on an installment loan, usually expressed as a percentage of the loan balance or payment.
Late payment A late payment is your failure to make at least the minimum payment so that it reaches us by or before the time and due date on your bill.
Late-payment fee A fee charged if your payment is received after the due date.
Lead underwriter When a company wants to raise capital by selling securities to investors, it partners with an investment bank, known as the lead underwriter.
Lease A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent).
Lender An individual or financial institution that lends money with the expectation that the money will be returned with interest.
Lender-Placed Insurance insurance placed on a home or property by a lender to protect their interest in the collateral which secures the loan.
Level load Some load mutual funds impose a recurring sales charge, called a level load, each year you own the fund rather than a sales charge to buy or sell shares.
Level Premium Insurance Insurance for which the cost is distributed evenly over the premium payment period.
Level term insurance With a level term life insurance policy, your annual premium remains the same for the term, which may be as long as 10 or 20 years.
Level yield curve A level yield curve results when the interest rate on short-term US Treasury issues is essentially the same as the rate on long-term Treasury bonds.
Leverage Leverage is an investment technique in which you use a small amount of your own money to make an investment of much larger value.
Leveraged buyout A leveraged buyout occurs when a group of investors using borrowed money, often raised with high yield bonds or other kinds of debt, takes control of a…
leveraging The borrowing of money for investment purposes.
Liability A legally enforceable financial obligation caused by negligence.
Liability Coverage Insurance protection that pays for claims or judgments brought against the insured.
Liability insurance Insurance that pays when you are liable for injuries to other persons or damage to their property.
Liability limits The maximum amount your liability policy will pay. Your policy must pay at least $25,000 for each injured person, up to a total of $50,000 per accident…
Liable Responsible or answerable by law; legally obligated.
Lien Legal claim against a property. Once the property is sold, the lien holder is then paid the amount that is owed.
Lien Status For HMDA reporting purposes, lenders are required to report lien status for loans they originate and applications that do not result in originations…
Lienholder A lienholder is the bank, finance company, credit union, other financial institution, or individual with whom you signed an agreement to borrow money…
Life expectancy Your life expectancy is the age to which you can expect to live. Actuarial tables establish your official life expectancy, which insurance companies use…
Life insurance Life insurance is a contract you sign with an insurance company, obligating it to pay a death benefit of a certain value to the beneficiaries you name.
Life settlement If you are over age 70 and no longer need your life insurance policy, you may be able to sell it to a third party in what's called a life settlement.
Lifecycle fund A lifecycle fund, which is a fund of funds, invests in individual mutual funds that a fund company puts together to help investors meet their objectives…
Lifeline account A lifeline account is a basic checking account with low or no minimum deposit and balance requirements and very low or no monthly fees.
Lifetime learning credit You may qualify to claim a lifetime learning tax credit of up to $2,000 each year for qualified higher educational expenses for yourself, your spouse, or…
Limit order An order to buy or sell securities in which the client has specified the price. The order can be executed only at the specified price or a better one.
Limit price A limit price is the specific price at which you tell your stockbroker to execute a buy or sell order on a particular security.
Limited liability company Organizing a business enterprise as a limited liability company (LLC) under the laws of the state where it operates protects its owners or shareholders…
Limited partner A limited partner is a member of a partnership whose only financial risk is the amount he or she has invested.
Limited partnership A limited partnership is a financial affiliation that includes at least one general partner and a number of limited partners.
Limited Tort Limited Tort offers you a savings on your premiums. You are still able to recover all out-of-pocket medical and other expenses; however, you are not able…
Limits The maximum amount of benefits the insurance company agrees to pay under an insurance policy in the event of a loss.
Line of Credit A pre-approved loan authorization with a specific borrowing limit based on creditworthiness.
Lipper, Inc Lipper provides financial data and performance analysis for more than 30,000 open- and closed-end mutual funds and variable annuities worldwide.
Liquid Asset Liquid assets are accounts or securities that can be easily converted to cash at little or no loss of value.
Liquidity The ability of the market for a security to absorb a reasonable amount of buying or selling without major price changes.
Listed security A listed security is a stock, bond, options contract, or similar product that is traded on an organized exchange.
Listing Broker This is the real estate broker that represents the sellers. They will market the property to bring buyers, which in turn bring offers to the seller.
Listing requirement Listing requirements are the standards a corporation must meet to have its stock or bonds traded on a particular exchange.
Living Benefits (See Accelerated Death Benefits.)
Living will A living will is a legal document that describes the type of medical treatment you want-or don't want-if you are terminally ill or unable to communicate…
Load Commissions charged on the purchase or sale of mutual fund units.
Load fund Some mutual funds charge a load, or sales commission, when you buy or sell shares or, in some cases, each year you own the fund.
Loan A transaction in which one entity, the lender, allows another, the borrower, to use property.
Loan Application Number A unique identifier (up to 25 characters long) that can be used to retrieve the particular loan application to which the entry relates.
Loan Application Register (LAR) also known as the HMDA-LAR, the LAR, or the Register. The term LAR refers to the loan application register format that has been prescribed for reporting…
Loan Contract The written agreement between a borrower and a lender in which the terms and conditions of the loan are set.
Loan Fee A fee charged by a lender to make a loan (in addition to the interest charged to the borrower).
Loan flip The lender encourages you to get additional cash by refinancing your mortgage again and again.
Loan modification An adjustment or compromise of an existing residential mortgage loan. (Excludes a refinancing transaction.)
Loan modification activities For compensation or gain, or in the expectation of compensation or gain, engaging in or offering to engage in effecting loan modifications in Idaho.
Loan Modification Provision A contractual agreement in a loan that allows the borrower or lender to permanently change one or more of the terms of the original contract.
Loan note A loan note is a promissory agreement describing the terms of a loan and committing the person or institution borrowing the money to live up to those…
Loan Origination Fees Fees charged by the lender for processing the loan and which are often expressed as a percentage of the loan amount.
Loan Proceeds The net amount of funds that a lending institution disburses under the terms of a loan, and which the borrower then owes.
Loan Purpose Indicates whether the purpose of the loan or application was for home purchase, home improvement, or refinancing.
Loan Term The period of time between the start date and the termination date of a note or mortgage.
Loan to Value (LTV) Ratio in real estate lending, the outstanding principal amount of the loan divided by the appraised value of the property underlying the loan.
Loan Type Indicates whether the loan granted, applied for, or purchased was conventional, government-guaranteed, or government-insured.
Loan Value (See Policy Loan.)
Loan-to-Value Ratio (LTV) The ratio of the loan principal (amount borrowed) to the appraised value (selling price).
Loan-to-Value Ratios (LTV) The ratio of mortgage amount to value or sales price of a home. (Mortgage amount divided by value or sales price.).
Loan/Mortgage Broker An organization that provides (or offers to provide) the service of improving your credit record, obtaining a loan for you, or providing advice or…
lobbyist A person who represents the concerns or special interests of a particular group or organization in meetings with lawmakers.
Local Check A check payable by, at, or through a bank in the same check processing region as the location of the branch of the depository bank.
Lock-In The process by which a lender commits to lend at a particular rate as long as the mortgage transaction closes within a specified time period.
Lock-in agreement A written agreement guaranteeing a homebuyer a specific interest rate on a home loan provided that the loan is closed within a certain period, such as 60…
Lock-up period A lock-up period is the time during which you cannot sell an investment that you own.
Locking Your Interest rate on a mortgage loan request for a specified period of time.
Logarithmic scale On a logarithmic scale or graph, comparable percentage changes in the value of an investment, index, or average appear to be similar.
long A term signifying ownership of securities. "I am long 100 XYZ," means that the speaker owns 100 shares of XYZ.
Long bond Thirty-year bonds issued by the US Treasury are referred to as long bonds. The interest rate on the long bond is typically but not always higher than the…
Long position Having a long position in a stock means you own the security. You have the right to collect the dividends or interest the security pays, the right to sell…
long-distance telephone tax refund Taxpayers are eligible to file for refunds of all excise tax they have paid on long-distance service billed to them after Feb. 28, 2003.
Long-term capital gain (or loss) When you sell a capital asset that you have owned for more than a year at a higher price than you paid to buy it, any profit on the sale is considered a…
Long-term care insurance Long-term care insurance is a policy designed to cover at least some of your expenses if you have a chronic but not life-threatening illness, long-term…
Long-term equity anticipation securities (LEAPS) These long-term options on stocks have expiration dates of up to three years rather than the shorter terms of most stock options, which are never longer…
Loose credit In order to combat a sluggish economy, the Open Market Committee of the Federal Reserve (the Fed) may institute a loose credit policy.
Loser Stocks whose market prices drop the most during the trading day are described, rather bluntly, as losers.
Loss The amount an insurance company pays on a claim.
Loss (Realized Gain) A gain (loss) that has occurred financially. The difference between the principal amount received and the cost basis after the sale of an asset.
Loss (Unrealized Gain) A profit (loss) that has not been realized through the sale of a security. The gain (loss) is realized when a security or futures contract is actually…
Loss history Refers to the number of insurance claims previously filed by a policyholder. A company will consider loss history when underwriting a new policy or…
Loss Mitigation The full range of solutions that may avert either the loss of a debtor’s property to foreclosure, increased costs to the lender or both.
Loss of use A provision in homeowners and renters insurance policies that reimburses policyholders for the additional costs (housing, food, and other essentials) of…
Lowest Floor The lowest floor of the lowest enclosed area (including a basement). An unfinished or flood-resistant enclosure, usable solely for parking of vehicles…
Lump sum A lump sum is an amount of money you pay or receive all at once rather than in increments over a period of time.
Lump-Sum Distribution When you retire, you may have the option of taking the value of your pension, salary reduction, or profit-sharing plan in different ways.
luxury tax A tax paid on expensive goods and services considered by the government to be nonessential.