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Glossary > I
Frequently used terms
Income Property
Independent
Contractor
Index
Initial
Rate Cap
Inspection Fee
Insurance Binder
Interest
Rate Cap
Interest Rate
Ceiling
Interest Only
Loan
Investment Property
Impact fees
Fees collected from developers of new homes to pay for schools,
parks and other facilities.
Implied warranty of habitability
Legal doctrine stating that all new homes are assumed to be
fit for human habitation and must meet all building codes.
Impounds
A portion of the monthly mortgage payment that is placed in
an account and used to pay for hazard insurance, property taxes
and private mortgage insurance( if applicable).
Income property
Property that is not occupied by the owner but is used to
generate income.
Incurable defect
A defect in a property that cannot be fixed or would cost too
much to repair relative to the value of the property.
Independent contractor
A person hired to do a particular job, subject to the direction
of a supervisor. An independent contractor pays for
his or her own expenses and taxes and receives no employee
benefits.
Index
Financial tables used by lenders to calculate interest rates
on adjustable mortgages. Commonly used indexes are the
Prime Rate, the LIBOR and Treasury bills.
Indexed Rate
The sum of the published index plus a margin. For example
if the index were 5% and the margin 2.75%, the "fully
indexed rate" would be 7.75%.
Infill housing
Home construction in established areas.
Infiltration
Air from the environment that penetrates a building.
Infrastructure
The utilities, roads, schools, parks and communications systems
in a community.
Initial interest rate
The original interest rate on an adjustable rate mortgage.
This rate may be subject to various adjustment at points throughout
the mortgage.
Initial rate cap
A specific limit defined by some adjustable rate loans (ARMs)
for the maximum amount the interest rate may increase at the
expiration of the initial interest rate.
Initial rate duration
Most adjustable rate loans (ARMs) offer an initial interest
rate below the current market rate. This initial or "teaser"
rate expires after a period called the initial rate duration,
which may last months or years.
Inlet valve
The mechanism inside a toilet tank that automatically fills
the tank with water when the tank empties. The inlet valve is
connected to the shutoff valve under the toilet.
Inspection fee
The fee paid to a licensed property inspector in order to
determine the present physical condition of the property.
Inspection report
A licensed property inspectors; written report of the property's
condition.
Installment contract
A purchase agreement where the buyers do not receive the title
to the property until all installments are paid.
Installment sale
A real estate transaction in which the sales price is paid in
installments.
Instrument
A written legal document.
Insulation
Materials that slow heat loss such as cellulose, glass fiber,
rock wool, polystyrene, urethane foam, and vermiculite.
Insurable title
Title to property that a company agrees to insure against
defects and disputes.
Insurance
Insurance policies guarantee compensation for specific losses
and can be purchase in various forms including hazard, private
mortgage, and earthquake.
Insurance binder
A temporary insurance arrangement usually put in force until
a permanent policy can be obtained.
Insured Mortgage
A mortgage that is insured (guaranteed) by the Federal Housing
Administration (FHA) or by private mortgage insurance (PMI).
Interest accrual rate
The rate at which interest accrues on a mortgage.
Interest paid over life of loan
The total amount paid to the lender for the use of money during
the time the money is borrowed.
Interest rate
The fee, expressed as a percentage, charged for a loan.
Interest rate buy-down plans
For buyers with limited cash reserves some sellers are willing
to advance funds from the sale of the home to buy down the interest
rate and reduce the buyer's monthly obligation.
Interest rate cap
The maximum interest rate charge allowed on the monthly payment
of an adjustable rate mortgage during an adjustment period.
Interest rate ceiling
The highest interest rate a lender can charge for an adjustable
rate mortgage.
Interest Rate Floor
For an adjustable-rate mortgage (ARM), the minimum possible
interest rate, as specified in the mortgage note.
Interest only loan
The borrower pays only the interest that accrues on the loan
balance each month. Because each payment goes toward
interest, the outstanding balance of the loan does not decline
with each payment.
Interim financing
Short-term financing used by sellers to bridge the gap between
the sale of one house and the purchase of another (also known
as bridge or swing loans). A construction loan is also
a form of interim financing.
Investment property
Real estate that generates income, such as an apartment building
or a rental home.
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