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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Income Property
Real estate developed or improved to produce income.

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.

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."

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

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 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 Rate for HECMs
The interest rate on a Home Equity Conversion Mortgage (HECM) adjusts monthly or yearly. It is tied to the weekly average yield of U.S. Treasury securities adjusted to a constant maturity of one year. The interest charged on the HECM loan will be payable to your lender when the loan terminates.

InterestFirstSM Mortgage
If you're looking to leverage your mortgage to expand purchasing power, this mortgage offers the benefit of a low, fixed-rate monthly payment.

Advantages:

-- For the first 15 years, monthly payments are lower than a comparable 30-year fixed-rate loan.
-- Gain control of your cash flow.
-- Ideal if you plan to stay in your home no more than 15 years and want the lowest monthly payment for that period.
-- Flexible cash flow for college costs, home improvements, IRA contributions, consumer debt reduction, or optional principal payments.

Details:

-- For the first 15 years, you pay only the interest due every month.
-- Any prepayments will reduce your principal balance and reduce future monthly payments.
-- Prepayment of principal may be made without penalty.
-- Payment adjusts at the start of year 16 to cover all interest and principal due on the loan for the remaining 15 years.
-- Monthly payment is fixed during years 16 through 30.

Investment Property
A property that is not occupied by the owner.

 

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