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Impound
That portion of a borrower's monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Also known as reserves.

Impound Account
Portion of the borrower’s monthly mortgage payment that is held by the lender to pay for property taxes, hazard insurance, mortgage insurance, ground rent, and other items as they become due. Also called escrow account.

Improvements
Any permanent structures to land such as buildings, fences and driveways, as well as landscaping, drainage, utilities, etc.

Income
The amount of money received from employment (salary, wages, tips), profit from financial instruments (interest, dividends, capital gains), or other sources (welfare, disability, child support, Social Security, and pensions).

Income Approach
A method of establishing market value by using rental income as a factor for calculating value.

Income Property
Real estate developed or improved to produce income.

Index
1. Measurement used by lenders in a market to determine changes in an accrual rate. This can be based on a published, independent measure of current interest rates, such as a Treasury Bill. An index must be readily verifiable by the borrower and beyond the control of the lender. It provides a guideline that should accurately reflect the current cost of lending money. 2. A measure of prevailing market interest rates. The index used with the margin to determine a new interest rate at the time of adjustment. If the index increases, the interest rate increases unless an interest rate cap is reached. Often, these interest rates are the rates for US Treasury securities. Treasury securities have become popular as indexes because they are easy to monitor and reflect economic conditions accurately.

Indexed Rate
The sum of the published index plus the margin. Often, lenders charge less than the indexed rate the first year of an adjustable-rate mortgage.

Inflation
An increase in the prices of goods and services that is generally expressed as an annual percentage increase in the Consumer Price Index, as compiled by the Department of Labor.

Initial Borrower Interest Rate
The rate on which the borrower's first payment is calculated.

Initial Borrower Payment Rate
The annual interest rate used to calculate the borrower's initial cash payment.

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 first year’s interest rate of a 1-year adjustable rate mortgage (ARM) or the rate for the first period of other ARMs or non-fixed products.

Installment
The regular periodic payment that a borrower agrees to make to a lender.

Installment Loan / Installment Credit
An account in which the debt is divided into amounts to be paid successively at specific intervals set by the terms of the loan.

Institutional Lender
A financial institution that invests its own funds or funds it is managing in real estate. For example, mutual savings banks, life insurance companies, commercial banks, pension and trust funds, and savings and loan associations.

Insurable Title
Title to real property that a title insurance company will insure. The company issues a title insurance policy as evidence of its insurance.

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 Loan
A loan insured by the Federal Housing Administration (FHA) or a private mortgage guaranty insurance company.

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
1. A charge for borrowing money. It is usually expressed on an annual rate, or as a percentage, of the money still owed. For example, the interest rate might by 10%. If a person borrowed $10,000 and agrees to pay it in full as the end of one year, the interest will be $1,000. 2. A right, share or title in property. 3. A general term meaning partial or total right to a property. An interest in real estate might be a right, such as an easement (See Easement), a lease or partial or full ownership.

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 fee charged or paid for money lent, expressed as a percentage of the principal.

Interest Rate Buy-down Plan
A temporary buy-down 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 buy-down is paid the same way but reduces the interest rate over the entire life of a home loan.

In Testate
To die without a will.

Introductory Rate
The low rate charged by a lender for an initial period to encourage borrowers to accept the credit terms. After the introductory period is over, the rate charged increases to the indexed rate or the stated interest rate. Often called a teaser rate or intro rate.

Interest Rate Cap
A provision of an ARM limiting how much interest rates may increase per adjustment period.

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.

Investment
An asset or item of value that is purchased to generate a profit at some future point.

Investment Property
A property that is not occupied by the owner and is generally rented to a tenant to produce income.

Investor
A person who makes investments.