Incompetent: One who is mentally incompetent, incapable; any person who, though not insane, is, by reason of old age, disease, weakness of mind, or any other cause, unable, unassisted, to properly manage and take care of self or property and by reason thereof would be likely to be deceived or imposed upon by artful or designing persons.
Installment Note: A note which provides for a series of periodic payments or principle and interest, until amount borrowed is paid in full. This periodic reduction of principal amortizes the loan.
Institutional Lenders: A financial intermediary or depository, such as a savings and loan association, commercial bank, or life insurance company, which pools money of its depositors and then invests funds in various ways, including trust deed and mortgage loans.
Instrument: A written legal document; created to effect the rights of the parties, giving formal expression to a legal act or agreement for the purpose of creating, modifying or terminating a right. Real estate lenders’ basic instruments are: promissory notes, deeds of trust, mortgages, installment sales contracts, leases, assignments.
Interest: A portion, share or right in something. Partial, not complete ownership. The charge in dollars for the use of money for a period of time. In a sense, the “rent” paid for the use of money.
Interest Only Loan: A straight, non-amortizing loan in which the lender receives only interest during the term of the loan and principal is repaid in a lump sum at maturity.
Interval Ownership: A form of timeshare ownership. (See Timeshare Ownership.)
Involuntary Lien: A lien imposed against property without consent of an owner; example: taxes, special assessments, federal income tax liens, etc.
Joint Tenancy: Undivided ownership of a property interest by two or more persons each of whom has a right to an equal share in the interest and a right of survivorship, i.e.; the right to share equally with other surviving joint tenants in the interest of a deceased joint tenant.
Judgment Lien: A legal claim on all of the property of a judgment debtor which enables the judgment creditor to have the property sold for payment of the amount of the judgment.
Junior Mortgage: A mortgage recorded subsequently to another mortgage on the same property or made subordinate by agreement to a later recorded mortgage.
Land Contract: A contract used in a sale or real property whereby the seller retains title to the property until all or a prescribed part of the purchase price has been paid. Also commonly called a conditional sales contract, installment sales contract or real property sales contract. (See Real Property Sales Contract.)
Late Charge: A charge assessed by a lender against a borrower failing to make loan payments when due.
Lease: A contract between owner and tenant, setting forth conditions upon which tenant may occupy and use the property and the term of the occupancy. Sometimes used as an alternative to purchasing property outright, as a method of financing right to occupy and use real property.
Legal Description: A land description recognized by law; a descriptions by which property can be definitely located by reference to government surveys or approved recorded maps.
Lessee: One who contracts to rent, occupy, and use propoerty under a lease agreement; a tenant.
Lessor: An owner who enters into a lease agreement with a tenant; a landlord.
Lien: A form of encumbrance which usually makes specific property security for the payment of a debt or discharge of an obligation. Example: judgments, taxes, mortgages, deeds of trust, etc.
Life Estate: An estate or interest in real property, which is held for the duration of the life of some certain person. It may be limited by the life of the person holding it or by the life of some other person.
Liquidated Damages: A sum agreed upon by the parties to be full damages if a certain event occurs.
Lis Pendens: A notice filed or recorded for the purpose of warning all persons that the title or right to the possession of certain real property is in litigation; literally “suite pending”; usually recorded so as to give constructive notice of pending litigation.
Loan Closing: When all conditions have been met, the loan officer authorizes the recording of the trust deed or mortgage. The disbursal procedure of funds is similar to the closing of a real estate sales escrow. The borrower can expect to receive less than the amount of the loan, as title, recoding, service, and other fees may be withheld, or can expect to deposit the cost of these items into the loan escrow. This process is sometimes called “funding” the loan.