Mortgage and Real Estate Terms – I

INDEX – an economic indicator, usually a published interest rate, that determines changes in the interest rate of an adjustable rate mortgage . ARM rates are adjusted to reflect changes in the index. The margin is the amount a lender adds to the index to establish the actual interest rate on an ARM.

IN FILE CREDIT REPORT – a computer generated credit report of credit and legal information obtained from a credit repository. Some in file credit reports, may be a tri-merge of three credit reporting agencies.

INFLATION – an increase in the amount of money or credit available in relation to the amount of goods or services that are available. This causes an increase in the general price level of services and goods. In time, inflation reduces the purchasing power of the dollar, thus making it worth less money.

INITIAL INTEREST RATE – the original interest rate on a mortgage at the time of closing the loan. This rate changes on an adjustable rate mortgage (ARM). The initial interest rate is also known as a start rate or teaser rate.

INGRESS AND EGRESS – the right to enter and exit land.

INSOLVENCY – a condition in which a debtor is unable to pay his or her creditors.

INSTALLMENT – the periodic payment that a borrower agrees to pay a lender.

INSTALLMENT LOAN – borrower money that is repaid in payments, known as installments.

INSTITUTIONAL LENDER – a financial institution that lends to the general public. Some examples are mutual savings banks, commercial banks, federal savings banks (formerly called savings and loans), pension and trust funds, life insurance companies.

INSURABLE INTEREST – the interest of an owner, lessee, mortgagee or trustee which is insured against financial loss in the case of specified events.

INSURABLE TITLE – a real property title that a title insurance company agrees to insure against defects.

INSURANCE – a contract that provides compensation for specific losses in exchange for a periodic payment.

INSURED LOAN – generally speaking, a mortgage loan insured by FHA or a private mortgage insurance company.

INTEREST (LOANS) – the sum paid for borrowing money, which pays the lender’s costs of doing business along with repaying the lenders source of money as well. “Interest Rates” are typically a function of market conditions, expenses, and borrower risk of loss probability. For example, all things being equal, if you compared same exact loan – lender to lender to lender, they’ll normally cost almost the same.

INTEREST RATE CEILING – for an adjustable rate mortgage (ARM) loan, it’s the maximum interest rate, as specified in the mortgage note or deed of trust’s note.

INTEREST RATE FLOOR – again, for an adjustable rate mortgage (ARM) loan, it’s the lowest mortgage rate, as specified in the mortgage note or deed of trust’s note.

INVESTMENT PROPERTY – a real property that is not occupied by the owner. Find out more about investment property loans.

INVESTOR – any person or institution that invests in mortgage instruments or other items of value.

INDIVIDUAL RETIREMENT ACCOUNT (IRA) – 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 other forms of approved investments accounts – such as stock, bonds, or mutual funds.