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Real Estate Glossary
To view a real estate term, click on one of the letters below.
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I
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. Some
lenders provide caps that limit how much the interest rate or loan payments may
increase or decrease.
In-File Credit Report - An objective account, normally computer-generated, of
credit and other financial information obtained from a credit reporting
agencies.
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 Draw Amount - The amount of the home equity line of credit that the
borrower is requesting at closing (up to, but never exceeding, the credit line
amount).
Initial Interest Rate - The starting interest rate for an adjustable-rate
mortgage (ARM) loan or variable-rate home equity line of credit. At the end of
the effective period for the initial rate, the interest rate adjusts
periodically during the life of the loan based on changes in a specified
financial index. Sometimes known as "start rate," "intro rate" or "teaser rate."
Introductory Rate - The starting rate for a home equity loan or line of credit,
usually a discounted rate, for a short period of time. See initial interest
rate.
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 (PMI). 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 amount the lender charges to lend you 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.
Interest Payment - The portion of a monthly payment that goes to interest based
on the amortization schedule.
Interest Rate - The percentage rate of return charged for use of a sum of money.
This percentage rate is specified in the mortgage note. See note rate.
Interest Rate Buydown Plan - A temporary buydown gives a borrower a reduced
monthly payment during the first few years of a home loan and is typically paid
for in an initial lump sum made by the seller, lender, or borrower. A permanent
buydown is paid the same way but reduces the interest rate over the entire life
of a home loan.
Investment Property - A property that is not occupied by the owner and is
generally rented to a tenant to produce income.
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