Real estate developed or improved to produce income.
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.
in-file credit report
An objective account, normally computer-generated, of credit and
legal information obtained from a credit repository.
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."
The regular periodic payment that a borrower agrees to make to a
Borrowed money that is repaid in equal payments, known as installments.
A furniture loan is often paid for as an installment loan.
A property title that a title insurance company agrees to insure
against defects and disputes.
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.
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.
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.
The fee charged for borrowing 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,
although it is not used for an adjustable-rate mortgage (ARM) with
payment change limitations.
Interest only mortgage
Interest Only referst to the type of payment terms on a mortgage where a lender does not require the mortgagor to repay any of the principle loan balance for a specific period of time. A typical interest only mortgage loan period will range from between one to five years on a standard loan. Then it will usually convert to an amortizing loan, in which a higher payment will be required to assure the principle balance of the mortgage is eventually repaid. Interest only mortgage loans are very popular today with the increased loan sizes due to rapidly rising home prices. Interest only mortgage loans also refer to bridge or hard money mortgage loans that are generally short term and need to keep payments to a minimum.
The rate of interest in effect for the monthly payment due.
interest rate buydown
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
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.
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.