In-File Credit Report
An objective
account, normally computer-generated, of credit and legal information
obtained from a credit repository.
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.
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.
The regular
periodic payment that a borrower agrees to make to a lender. The
installment is more often referred to as your monthly mortgage payment.
Installments, or monthly payments, can be made either monthly or biweekly,
depending on your mortgage type. Your approved lender may also offer
additional payment plans tailored to fit your needs.
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.
Simply put,
this is the fee that is charged for borrowing money from lenders.
The
interest rate is the rate of interest that is in effect when the monthly
payment is due. An interest rate ceiling -- for an adjustable-rate
mortgage (ARM) -- is the maximum interest rate, as specified in the
mortgage note; the interest rate floor is the minimum interest rate, as
specified in the mortgage note.
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.
Interest Rate for HECMs
The
interest rate on a Home Equity Conversion Mortgage (HECM) adjusts monthly
or yearly. It is tied to the weekly average yield of U.S. Treasury
securities adjusted to a constant maturity of one year. The interest
charged on the HECM loan will be payable to your lender when the loan
terminates.
InterestFirstSM Mortgage
If you're
looking to leverage your mortgage to expand purchasing power, this
mortgage offers the benefit of a low, fixed-rate monthly payment.
Advantages:
-- For
the first 15 years, monthly payments are lower than a comparable 30-year
fixed-rate loan.
-- Gain control of your cash flow.
-- Ideal if you plan to stay in your home no more than 15 years and want
the lowest monthly payment for that period.
-- Flexible cash flow for college costs, home improvements, IRA
contributions, consumer debt reduction, or optional principal payments.
Details:
-- For
the first 15 years, you pay only the interest due every month.
-- Any prepayments will reduce your principal balance and reduce future
monthly payments.
-- Prepayment of principal may be made without penalty.
-- Payment adjusts at the start of year 16 to cover all interest and
principal due on the loan for the remaining 15 years.
-- Monthly payment is fixed during years 16 through 30.
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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