Foreclosures Glossary - Letter I

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impact fees

Fees that are collected from developers of new homes to pay for schools, parks and other facilities.

implied warranty of habitability

A legal doctrine that states that all new homes are assumed to be fit for human habitation and meet all the building codes.

impounds

A portion of monthly mortgage payments that is set aside in a separate account and used to pay for insurance and property taxes.

improvement

Any change that adds value to a building or prolongs its useful life.

in-file credit report

An objective history report from credit repositories.

income property

Any property that is not occupied by the owner but is used to generate income.

incurable defect

A defect in the property that cannot be fixed or would cost too much to repair relative to the value of the property.

independent contractor

A contractor hired for a specific job; the contractor pays for their own expenses and taxes and receives no employee benefits.

index

Financial tables that are used to calculate the interest rates on adjustable mortgages and on Treasury Bills.

Individual Retirement Account (IRA)

A tax-deferred savings account in which a person may accrue retirement funds.

infill development

Significant new construction in an already established area.

infill housing

Home construction in and already established areas.

infiltration

Air from the environment that enters a building.

inflation

An increase in the level of consumer prices that is the result of an increased availability of money and credit that is proportionately more than the availability of goods and services.

infrastructure

Community roads, schools, parks, utilities, bridges and communication systems.

initial interest rate

The original interest rate on an adjustable rate mortgage.

initial rate cap

A specified limit that the interest rate may increase defined in some adjustable rate loans.

initial rate duration

An initial interest rate in an adjustable rate loan, that is below the current market rate, for a specified period of time.

inlet valve

A mechanism inside a toilet tank that automatically refills the tank with water after then tank empties.

inspection fee

A fee paid to a home inspector for the physical inspection of a building.

inspection report

A report completed by a home inspector after an inspection of the buildings exterior, foundation, framing, plumbing, electrical system, heating, air conditioning, fireplace, kitchen, bathroom, roof and interior.

installment contract

A purchase agreement where the buyer does not receive the title to the property until all installments are paid.

installment sale

A real estate transaction where the sales price is paid in installments.

instrument

A written legal document.

insulation

Materials in a building that slow heat loss.

insurable title

Title to a property that is insurable.

insurance

Policies that owners can purchase to guarantee compensation for specific losses or damages.

insurance binder

A temporary arrangement put in effect until a permanent policy is obtained.

interest

The fee that borrowers pay for a loan; calculated based on the percentage of the total loan.

interest accrual rate

The rate at which interest accrues on a mortgage.

interest paid over life of loan

The total amount paid to a lender during the life of a loan.

interest rate

The fee that is charged by the lender for a loan; expressed as a percentage.

interest rate buy-down plans

An advancement of funds from the sale of a home for the purpose of buying down the interest rate and reducing the buyer’s monthly obligation.

interest rate cap

The maximum interest rate charge allowable on the monthly payment of an adjustable rate mortgage during the adjustment period.

interest rate ceiling

The highest interest rate a lender can charge for an adjustable rate mortgage.

interest-only loan

A loan where the borrower pays only the interest that accrues on a loan balance each month; all the payments go toward interest therefore the outstanding balance of the loan does not decline with the payments.

interim financing

Short-term financing used by sellers to bridge the gap between the sale of one house and the purchase of another. Also known as a bridge or swing loan.

investment property

Real estate property that generates an income.