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Impound Account
An account that collects and hold funds for the payment of taxes and
insurance on the property.
An impound account is usually required by the lender when the borrower's
down payment is less than 20%.
Funds are usually collected at the same time as loan payments.
Improved Land
Land that has been partially or fully developed for use.
Income Property
Real estate developed or improved so that it generates rental income.
Index
A number used to compute the interest rate for an
adjustable-rate mortgage (ARM).
The index is generally a published number or percentage, such as the average
interest rate or yield on Treasury bills.
A margin is added to the index to determine the
interest rate that will be charged on
the ARM.
Inflation
An increase in the amount of money or credit available in
relation to the amount of goods or services available, which causes an increase in the general price level
of goods and services.
Over time, inflation reduces the purchasing power of a dollar, making it worth less.
Initial Interest Rate
The original interest rate of the
mortgage at the time of
closing.
This rate changes for an
adjustable-rate mortgage (ARM).
Sometimes known as "start rate" or "teaser."
Inspection
A physical scrutinizing review of property or of documents.
Insurable Title
A property title that a
title insurance company agrees to insure against defects
and disputes.
Insurance
A contract that provides compensation for specific
losses in exchange for a periodic payment.
An individual contract is known as an insurance policy,
and the periodic payment is known as an insurance premium.
Insurance Binder
A document that states that insurance is temporarily in effect.
Because the coverage will expire by a specified date, a permanent policy must be obtained before
the expiration date.
Insured Mortgage
A mortgage that is protected by the Federal
Housing Administration (FHA) or by private mortgage insurance.
If the borrower defaults on the
loan, the insurer must pay the
lender the lesser of the loss incurred or the insured amount.
Interest Rate
The percentage of a sum of money charged for its use.
The rate of interest for a mortgage is usually paid monthly.
Interest Rate Ceiling
For an adjustable-rate mortgage (ARM),
the maximum interest rate, as specified in the mortgage note.
Interest Rate Floor
For an adjustable-rate mortgage (ARM),
the minimum interest rate, as specified in the mortgage note.
Investment Property
A property that is not occupied by the owner.
IRA (Individual Retirement Account)
A retirement account that allows individuals to make tax-deferred contributions
to a personal retirement fund. Individuals can place IRA funds in bank accounts or
in other forms of investment such as stocks, bonds, or mutual funds.
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