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GLOSSARY
Impact fees
Fees imposed on developers when developing a new jurisdiction to help cover the costs of the “impact†the new neighborhood will have on the community. The fees are then passed onto the new property owners rather than the tax payers. These fees help cover services that residents will need, such as schools, parks, road improvements and sewerage.
Impound account
Also called an escrow account. These accounts, which are held by the lender, into which the borrower makes payments used for property taxes and insurance. Money is added to the account every time a mortgage payment is made and the lender assumes the responsibility of fund disbursement. The term is sometimes shortened to impounds.
Inclusionary Zoning
A common practice in urban areas, and when planning new communities and developments that provides housing to all income brackets. Inclusionary zoning ordinances often require a set percentage of affordable housing units.
Income property
Non owner occupied property that is rented to others
Index
A table of interest rates being paid on debt that is used to determine interest-rate changes for adjustable-rate mortgages and other variable rate loans such as credit card debt.
Infrastructure
Basic structures that a community needs, such as schools, roads, water and electrical lines, power plants and communications systems.
Initial interest rate
The starting percentage a borrower pays for the use of money on an adjustable-rate mortgage.
Installment contract
A payment agreement in which the buyer makes a series of payments.
Installment credit
A type of credit or loans in which a monthly payment is made for a specified amount of time. The most common forms of installment credit are mortgages and car loans.
Intangible property
Non-physical or abstract property that does not have value itself, but represents something else. Stocks, bonds and franchises are examples of intangible property as are patents and copyrights.
Interest
In finance, a fee paid for borrowing money, calculated as a percentage of the amount borrowed over a specified period of time. Interest can also refer to a lender's earnings over time on money loaned, such as the interest paid on a savings account or certificate of deposit.
Interest only loan
Initially the borrower pays only the interest on the mortgage over a fixed term in monthly installments. At the end of the interest-only pay period, the unpaid balance of the loan for the principal and any additional interest is then paid off in either a lump sum or in installments.
Interest rate
An amount charged per year on a personal or home loan based on a percentage which varies depending on the type of loan.
Interest rate buy-down plan
In the first years (usually two years) of a fixed rate loan the borrower pays a fee for lower rate.
Interest rate ceiling
The absolute maximum amount of interest a lender can charge a borrower for an adjustable rate mortgage.