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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