Implied Warranty of Habitability – A legal doctrine that states that landlords must offer and maintain livable premises for their tenants. If a landlord does not provide habitable housing, tenants in most states may legally withhold rent or take other measures, including hiring someone to fix the problem or moving out.

Impound Account – See Escrow Account.

Improvements – Any additions to raw land, such as buildings, streets, sewers, etc. that will increase the property’s value.

Incidents of Ownership – Any control over property. If you give away property but keep an incident of ownership, then no gift has legally been made. For example, you may give away an apartment building but retain the right to receive rent form the property. This distinction can be important for those attempting to make large gifts to reduce your eventual estate tax.

Income Property – Real estate developed or improved to produce income.

Indemnify – To protect someone against damage or loss.

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.

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.”

Initial Note Rate – With regard to an adjustable rate mortgage, the note rate upon origination of the mortgage. This rate may be different from the fully indexed note rate.

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

Installment Contract – See Contract for Deed.

Installment Loan -Borrowed money that is repaid in equal payments, known as installments. A furniture loan is often paid for as an installment loan.

Installment Sale – The act of paying tax on the gain as the mortgage principal is collected. This occurs when a seller accepts a mortgage for part or all of the sale.

Insurance Binder – A document stating that temporary insurance is in effect. Since the coverage will expire by a certain date, a permanent policy must be obtained before the expiration date.

Insured Mortgage – A mortgage protected by either private mortgage insurance (PMI) or the Federal Housing Administration (FHA). If the borrower defaults on the loan, the insurer must pay the lender the loss incurred or the insured amount, whichever is less.

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.

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

Interest Rate Buydown 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.

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.

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 Rate – The percentage of the loan amount that is charged for borrowing money; the cost of the money in a percentage.

Interest Rate Buydown Plan – The seller, lender, or borrower pays an initial lump sum, which will entitle the borrower to a reduced monthly payment during the first few years of a home loan. A permanent buydown is paid in the same way, but it reduces the interest rate over the entire life of a home loan.

Interim Financing – A loan that is used when the property owner is unwilling or not able to arrange permanent financing.

Inter Vivos – A Latin phrase meaning “during one’s life.”

Intestate – A person has left no valid will.

Investment Property – 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.