The portion of a monthly mortgage payment that is earmarked to pay property taxes and property insurance premiums.
Impounding
The
collection and placement of monies by a lender into an account in order
to pay the borrower’s property taxes and insurance premiums when they
become due.
Income
Regular income from earnings, commissions, investments, rental payments or other sources.
Income property
Real estate developed or improved to produce income. A property that produces income, such as rental property.
Index
When
used in a mortgage note or credit agreement, a financial index is the
measurement used to decide how much the annual percentage rate will
change at the beginning of each adjustment period. Generally, the index
plus or minus margin equals the new rate that will be charged, subject
to any caps. Lenders use various financial index rates: London Interbank
Offered Rate [(LIBOR and Treasury-Indexed ARMs (T-Bills)]. A number,
usually expressed in the form of a percentage or ratio, that indicates
or measures a series of observations, especially those involving a
market or the economy.
Indexed Rate
An interest rate
charged on loans to borrowers that is calculated by taking the sum of a
benchmark index increase rate and a specified margin. The indexed rate
is used to calculate the interest rate on an Adjustable Rate Mortgage
(ARM).
Inflation
A general increase in prices coinciding with a fall in the real value of money. A result of excessive money chasing goods.
Inflation rate
The increase in price of consumer goods, usually expressed as a percentage over a specific period of time.
Initial advance
The process of obtaining an advance against available credit under your line of credit.
Initial Interest Rate
The interest rate that applies on the first day of the loan's term.
Initial advance at closing
You
have chosen our funds transfer option to reduce your interest rate.
Please verify that the account information is correct. If you maintain
at least this $25,000 balance for the first three consecutive billing
cycles the account is open, you will receive .25% off your approved rate
for the life of the line.
Initial advance of $25,000 or more
The
initial advance of $25,000 or more discount applies for drawing an
initial advance of $25,000 or more, and maintaining at least that
minimum balance for the first 3 full consecutive billing cycles.
Initial draw amount
The
proceeds of the home equity line of credit or construction loan up to
an amount the borrower is allowed to request at closing.
Initial rate
The
starting interest rate. Some people call this the “teaser rate,”
because it gives you low interest and low monthly payments at the
beginning, but may adjust up at the next adjustment period (it will
usually adjust even if the index doesn’t go up, since it’s lower than
index plus margin for the initial period)
Inquiry
A request for your credit report, made by you or a company considering you for an offer of credit.
Insolvency
Insolvency
is a term for when an Individual or organization can no longer meet its
financial obligations with its lender(s) as debts become due.
Installment
A periodic partial payment of a debt.
Installment Debt
A
loan that is repaid by the borrower in regular installments.
Installment debt is generally repaid in equal monthly payments that
include interest and portion of principal.
Installment loan
A loan that is repaid in equal payments, known as installments.
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 an insurer in case of default. The
insurance protects the lender (not the borrower) if a borrower defaults
on the loan.
Interest
Interest is the charge for the privilege of borrowing money, typically expressed as an Annual Percentage Rate (APR).
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-only loan
A
loan for which you pay only the interest due for a portion of the loan
term. This lowers your periodic payment but does not decrease your
principal balance on the loan. Making interest-only payments will result
in larger payments being due at the end of the interest-only payment
period.
Interest rate
The
annual cost of a loan to a borrower, usually expressed as a percentage.
The interest rate does not include fees charged for the loan.
Interest rate Buy Down Plan
Arrangement
that allows the seller to deposit money to an account, from which the
money is released each month to reduce the Mortgagor's monthly payments
during the early years of the mortgage.
Interest rate Ceiling (Cap)
A
limit on how much the variable interest rate can increase at any one
time. Many home loans have both annual (or semiannual) caps and lifetime
caps, which limit the amount your payments can increase in an
adjustment period and over the life of the loan. Many caps allow a rate
increase of 2-5% over the starting interest rate in an adjustment period
(for example, a starting rate of 5% could increase to 7% or, depending
on the loan guidelines, to as much as 10%). A lender’s lifetime interest
rate cap is typically 6% over the life of the loan.
Interest Rate Change Date
Date upon which the rate of interest is subject to change.
Interest Rate Floor
The minimum interest rate allowed according to the contractual terms of the mortgage loan.
Investment property
Property that is purchased to generate rental income, or to be sold once it has appreciated in value.
Immediate annuity
You can convert a lump sum into payments for life or for a
certain number of years from an immediate annuity. Payments begin
immediately.
iMoneyNetTM Prime Retail Index
An unmanaged index that is an average of non-government
retail money market mutual funds. Portfolio holdings of prime money
market mutual funds include U.S. Treasury, U.S. non-Treasury
obligations, repurchase agreements, time deposits, domestic and foreign
bank obligations, commercial paper, floating-rate notes and asset-backed
commercial paper.
Inception date
The date a fund’s operations begin.
Income fund
A fund that primarily seeks current income rather than capital appreciation.
Index
A benchmark used to evaluate a fund’s performance. The
most common indexes for stock funds are the Dow Jones Industrial Average
and the Standard & Poor’s 500 Index.
Index fund
An investment fund that seeks to parallel the performance
of a particular stock market or bond market index. Often referred to as
passively-managed investments.
Individual annuity contract
An annuity contract between an insurance company and a person or persons.
Individual Retirement Account (IRA)
IRAs are accounts that you own and fund through your own contributions. Two common types of IRAs are:
• Traditional IRAs
– Contributions are made with pre-tax dollars, and earnings are
tax-deferred. This means that you don’t owe taxes until the funds are
withdrawn, usually at retirement.
• Roth IRAs
– Contributions are made with after-tax dollars, so you don’t pay taxes on the money as it accumulates.
Individual service expenses
Charges applied to participants who take advantage of special plan features, such as participant loans.
Inflation
The general upward price movement of goods and services
in an economy. Inflation is generally one of the major risks to
investors over the long term because it erodes the purchasing power of
their savings.
Interest / Interest rate
The fee charged by a lender to a borrower, usually
expressed as an annual percentage of the principal. For example, someone
investing in bonds will receive interest payments from the bond’s
issuer.
Interest rate risk
The possibility that the market value of a bond or bond
fund will decrease due to rising interest rates. When interest rates
(and bond yields) go up, bond prices usually go down, and vice versa.
Interim Financing
A
short term loan secured to cover certain major expenditures, such as
construction costs, until permanent financing is obtained.
International fund
A fund that invests primarily in the securities of
companies located outside of the United States. Or whose revenues come
from outside the United States.
Investor
A buyer of a security or other property who seeks to profit from it without exhausting the principal.
Investment adviser
A person or organization hired by an investment fund or
an individual to give professional advice on investments and asset
management practices.
Investment company
A corporation or trust that invests pooled shareholder
dollars in securities that are appropriate to the organization’s
objective. The most common type of investment company, a mutual fund,
stands ready to buy back its shares at their current net asset value.
Investment objective
The goal that an investment fund or investor seeks to achieve, such as growth or income.
Investment return
The gain or loss on an investment over a certain period,
expressed as a percentage. Income and capital gains or losses are
included in calculating the investment return.
Investment risk
The possibility of losing some or all of the amounts invested, or not gaining value in an investment.
Acronyms
IASB
International Accounting Standards Board
ICBA
Independent Community Bankers Association
IED
Initial Excrow Disclosure
IO
(interest only) a payment that only covers the interest on the loan
ILC
Improvement Location Certificate
IMF
International Monetary Fund
IO
Interest Only
IP
(Investment property) non owner occupied property that is rented out by the borrower
IRRRL
VA interest rate reduction refinance loan. This refinance loan allows you to lower your interest rate on an existing VA home loan