impound account
An account used to pay your hazard insurance, mortgage insurance and property taxes

An impound account is set up by the lender for you to prepay certain recurring costs at closing, such as your first 6 months of property taxes, your first 2 months of hazard insurance, and your first 2 months of mortgage insurance, if required. From then on, you pay these bills from this account.

Some lenders let you waive the impound account, but may tack on additional points to your closing costs if you choose to not have one. An impound account is also called an escrow account.

improvement (real estate)
You can increase your home's basis by spending money on improvements. Just make sure the upgrades meet IRS specs. A tax-acceptable improvement must add value to your home, "considerably" prolong your home's useful life or adapt your house to new uses. Examples include installing new plumbing or wiring, adding a bathroom or paving the driveway. If the improvements are purely for maintenance, to maintain the home, they are not included.

See IRS Publication 523, Selling Your Home

income property
Real estate developed or improved to produce income such as a duplex or commercial plaza.

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 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.
(See also Reference Rate.)

in-file credit report
An objective account, normally computer-generated, of credit and legal information obtained from a credit repository.

inflation
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."

inspection contingency
An "inspection contingency" protects you as a buyer in a purchase offer by allowing you to (within the terms of the contract) negotiate repairs or cancel closing on the deal,  if an inspector finds problems with the property.

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

installment loan
Borrowed money that is repaid in equal payments, known as installments. A furniture loan is often paid for as an installment loan. (Compare with an amortized loan.)

insurable title
A property title that a title insurance company agrees to insure against defects and disputes.

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. See hazard insurance.

insurance binder
A document that states that homeowners hazard insurance is temporarily in effect. Because the coverage will expire by a specified date, a permanent policy must be obtained before the expiration date.

Insurance Information Institute (III)
The Insurance Information Institute (I.I.I.) strives is to improve public understanding of insurance -- what it does and how it works. For over 40 years, the I.I.I. has provided definitive insurance information. Today, the I.I.I. is recognized by the media, governments, regulatory organizations, universities and the public as a primary source of information, analysis and referral concerning insurance. Contact them at 110 William Street, New York, NY 10038, 212-346-5500 or online at http://www.iii.org/

insured mortgage
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.

interest
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 loan
An interest-only loan is a loan in which for a set term the borrower pays only the interest on the principal balance, with the principal balance unchanged. At the end of the interest-only term the borrower may enter an interest-only mortgage, pay the principal, or (with some lenders) convert the loan to a principal and interest payment (or amortized) loan at his/her option.
(Read More)

interest rate
The rate of interest in effect for the monthly mortgage payment due.

interest rate buy-down plan
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 rate. (See also: Buy-down Mortgage.)

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 that is not occupied by the owner.  See income property.

IRA (Individual Retirement Account)
A retirement account that allows individuals to make tax-deferred contributions to a personal retirement fund.