Resources

Glossary

Illiquidity - top

Having inadequate cash to meet current obligations. Real property is considered an illiquid investment because of the time and effort required to convert it to cash.

Implied Agency - top

Form of agency that occurs when the words and actions of the parties indicate that there is an agency relationship.

Implied Contract - top

A contract created by actions, but not necessarily written or spoken.

Impound Account - top

A fund set aside for future needs, such as an escrow or reserve account.

Impounds - top

An impound refers to the funds a mortgagor pays to the lender along with their monthly principal and interest payments for the payment of real estates taxes and hazard insurance.  This is also referred to as an escrow account.  The money is held by the lender to make payments when they are due.

In-file Credit Report - top

A computer-generated report containing credit and legal information obtained from one of the main credit bureaus.

Income Property - top

Real estate developed and improved to produce steady income.

Index - top

A published interest rate used to establish the interest rate offered on an Adjustable Rate Mortgage (ARM).  Some of the most common indices are treasury bills, treasury securities, London Inter-Bank Offering Rates (LIBOR) and the Cost of Funds Index (COFI).

Index of Leading Indicators - top

An index of eleven indicators designed to forecast the strength of the economy six to nine months in the future. Frequency: monthly. Source: Commerce Department.

Individual Retirement Account - top

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.

Industrial Production - top

A fixed-weight measure of physical output of the nation’s factories, mines and utilities. Monthly percent changes in the index reflect the rate of change in output. Changes in industrial production are widely followed as a major indicator of strength in the manufacturing sector. Frequency: monthly. Source: Federal Reserve.

Inflation - top

An increase in the amount of money or credit available relative to the amount of goods or services available. Inflation causes an increase in the general price level of goods and services. Over prolonged periods, inflation can reduce the purchasing power of a dollar, making it worth less.

Initial Interest Rate - top

The original, starting interest rate of a loan at the time of closing. This rate changes for an adjustable-rate mortgage (ARM). Sometimes called a teaser rate

Installment - top

A regularly scheduled periodic payment that a borrower agrees to make to a lender.

Installment Loan - top

Borrowed money that is repaid in equal periodic payments. Cars and furniture are often paid for with installment loans.

Insurable Title - top

A property title that a title insurance company agrees to insure against defects and claims.

Insurance - top

A form of contract that provides compensation for specific losses in exchange for a periodic payment. An individual contract is known as an insurance policy. The periodic payments are known as insurance premiums.

Insurance Binder - top

A document stating that insurance is only temporarily in effect. Because the coverage will expire by a certain date, a permanent policy must be obtained prior to the expiration date.

Insured Mortgage - top

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 - top

The cost of the use of money.

Interest Accrual Rate - top

The rate at which interest accrues on a mortgage. Usually, it is also the rate used to calculate the monthly payments.

Interest Rate - top

The cost of borrowing a lender’s money.  Interest takes into account the risk and cost to the lender for a loan.  The interest rate on a fixed rate mortgage depends on the going market rate and how many discount points you pay up-front.  An adjustable rate mortgage’s interest is a variable rate made up of the index and the lender’s margin.

Interest Rate Buy-down Plan - top

An arrangement where the property seller, borrower or other party deposits money to an account so that it can be released each month to reduce the borrower’s interest rate or monthly payments during a specified period of a loan.

Interest Rate Ceiling - top

The maximum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage loan note.

Interest Rate Floor - top

The minimum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage loan note.

Investment Property - top

A property that is not occupied by the owner.

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