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Glossary of Terms - I

Income Property:

Real estate developed or purchased to produce income, such as a rental unit.

Indemnity:

Insurance against a possible loss or damage.  A title insurance policy is an example of a contract of indemnity.

Independent Contractor:

In real estate, a real estate sales agent who conducts real estate business through a real estate broker. 

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 United States 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 on the maximum or minimum interest rate that may be charged on the mortgage, stated in the note.

Individual Retirement Account (IRA):

A tax-deferred plan that can help you build a retirement nest egg.

Inflation:

An increase in prices.

Ingress:

The right to enter upon a tract of land.  Usually used as part of the term “ingress and egress” and interchangeably with the term “access.”

Initial Interest Rate:

The original interest rate for an adjustable-rate mortgage (ARM).  This is sometimes known as the “start rate.”

Inquiry:

A request for a copy of your credit report by a lender or other business that normally occurs when you fill out a credit application and/or request more credit.  Too many inquiries on a credit report can hurt your credit score; however, most credit scores are not affected by multiple inquiries from automobile or mortgage lenders within a short period of time.

Inspection Rider:

Rider to purchase agreement between a third-party relocation company and the buyer of a transferee’s property stating that the property is being sold “as is.”  All inspection reports conducted by the third-party company are disclosed to the buyer and it is the buyer’s duty to do his or her own inspections and tests.

Installment:

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

Installment Debt:

A loan that is repaid in accordance with a schedule of payments for a specified term (such as an automobile loan).

Installment Land Contract:

A contract where the buyer takes possession of the property while the seller retains the formal legal title to the property until the loan is paid in full.  In certain cases and under certain circumstances, the buyer can acquire an “equitable title” to the property prior to the loan being paid in full.

Insurance:

A contract under which, for consideration, one party (the insurer) agrees to indemnify another (the insured) for a possible loss under specified conditions.

Interest Accrual Rate:

The percentage rate at which interest accumulates or increases on a mortgage loan.

Interest Rate Cap:

For an adjustable-rate mortgage (ARM), a limitation on the amount the interest rate can change per adjustment or over the lifetime of the loan, as stated in the note.

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 Property:

A property purchased to generate rental income, tax benefits, or profitable resale rather than to serve as the borrower’s primary residence. Contrast with “second home.”