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income property
Real estate developed or improved to produce 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. This interest rate is subject to any caps that are associated with
the mortgage.
in-file credit report
An objective account, normally computer-generated, of credit and legal
information obtained from a credit repository.
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."
installment
The regular periodic payment that a borrower agrees to make to a lender.
installment loan
Borrowed money that is repaid in equal payments, known as installments.
A furniture loan is often paid for as an installment loan.
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 (MI). If the borrower defaults on the
loan, the insurer must pay the lender the lesser of the loss incurred
or the insured amount.
interest
The fee charged for borrowing money.
interest accrual rate
The percentage rate at which interest accrues on the mortgage. In most
cases, it is also the rate used to calculate the monthly payments, although
it is not used for an adjustable-rate mortgage (ARM) with payment change
limitations.
interest rate
The rate of interest in effect for the monthly payment due.
interest rate buydown plan
An arrangement wherein the property seller (or any other party) deposits
money to an account so that it can be released each month to reduce the
mortgagor's monthly payments during the early years of a mortgage. During
the specified period, the mortgagor's effective interest rate is "bought
down" below the actual interest rate.
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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