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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