What Is the Loan-To-Cost Ratio (LTC)? The loan-to-cost (LTC) ratio is a metric used in commercial real estate construction to compare the financing of a project (as offered by a loan) with the cost of building the project. The LTC ratio allows commercial real estate lenders to determine the risk of offering a construction loan.
What Is the Loan-to-Value (LTV) Ratio? The loan-to-value (LTV) ratio is an assessment of lending risk that financial institutions and other lenders examine before approving a mortgage. Typically, loan assessments with high LTV ratios are considered higher-risk loans. Therefore, if the mortgage is approved, the loan has a higher interest rate. Additionally, a loan with
What Is a Lobby? The term lobby refers to a group of people who band together and try to influence politicians and other individuals in public office. A lobby is typically formed to influence government officials to act in a way that is beneficial to the lobby’s or an industry’s best interests, either through favorable legislation or by
What Is a Lobster Trap? A lobster trap is a defense strategy used by small target firms to protect themselves against hostile takeovers initiated by larger corporations. Companies that employ this anti-takeover measure pass provisions in their charters that block shareholders with a stake of more than 10% from converting securities into voting shares. This prevents large
What Is a Local Tax? A local tax is an assessment by a state, county, or municipality to fund public services ranging from education to garbage collection and sewer maintenance. Local taxes come in many forms, from property taxes and payroll taxes to sales taxes and licensing fees. They can vary widely from one jurisdiction
What Is Lockbox Banking? Lockbox banking is a service provided by banks to companies for the receipt of payment from customers. Under the service, the payments made by customers are directed to a special post office box instead of going to the company. The bank goes to the box, retrieves the payments, processes them and
What Is a Locked-in Retirement Account? A Locked-in Retirement Account (LIRA) is a type of registered pension account in Canada that does not permit withdrawals before retirement except in exceptional circumstances. Locked-in Retirement Accounts are designed to hold pension funds for former employer-sponsored plan participants and certain others until they reach retirement age. Key Takeaways
What Is a Locked Market? A locked market refers to a situation where the bid and ask price for a security is identical. This is an abnormal market condition—the bid price will always be below the ask price in normal trading conditions. Locked markets occur due to the complexity of modern financial markets. Key Takeaways A locked
What Is a Lock Period? A lock period refers to a window of time, typically 30 to 90 days, during which a mortgage lender must keep a specific loan offer open to a borrower. During this period, the borrower prepares for closing, and the lender processes the loan application. A mortgage rate lock is an
What is a Lock-Up Period? A lock-up period is a window of time when investors are not allowed to redeem or sell shares of a particular investment. There are two main uses for lock-up periods, those for hedge funds and those for start-ups/IPO’s. For hedge funds, the lock-up period is intended to give the hedge
