IMPLIED CONTRACT

An agreement which is not reduced to writing but is created, under the common law, on the basis of the behavior of the parties which suggests that they are acting under an agreement.

IMPLIED WARRANTY

A guarantee of the condition of a thing or the truth of a statement which is created as a result of the actions of a party but not written down.

IMPOUND

The portion of a borrower's periodic payment on a loan that is collected to pay for items other than principal, interest or penalties (such as realty taxes, insurance premiums, etc.).

IMPOUND ACCOUNT

The trust account held by a lender into which payments for insurance, taxes, etc., paid by the borrower are placed prior to being disbursed by the lender. Also known as an Escrow Account

IMPROVED LAND

Also known as "developed land". Opposite of "raw or vacant land". Land which someone has, by dint of their labour, taken out of the state of nature.

IMPROVEMENTS

Things added to vacant land with the view to increasing its usefulness and value, such as buildings, parking areas, drainage works, etc.

IN REM

Latin term meaning "Against the thing." Used to describe a legal action which is taken against land rather than against the land owner, such as a bank's foreclosure on a defaulted mortgage.

INCOME PROPERTY

Real estate developed or improved to produce income.

INDEMNIFY

To take responsibility for the losses and damages suffered by another person.

INDEMNITY

A document in which one party agrees to take responsibility for the losses and damages suffered by another party or parties.

INDENTURE

Similar to a contract. An agreement between two or more parties, often referring to land.

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. Some lenders provide caps that limit how much the interest rate or loan payments may increase or decrease.

INDEXED LOAN

Any loan whose interest rate is adjusted in accordance with a rate published by an independent third party (an " index ").

IN-FILE CREDIT REPORT

An objective account, normally computer-generated, of credit and other financial information obtained from a credit reporting agencies.

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 DRAW AMOUNT

The amount of the home equity line of credit that the borrower is requesting at closing (up to, but never exceeding, the credit line amount).

INITIAL INTEREST RATE

The starting interest rate for an adjustable-rate mortgage (ARM ) loan or variable-rate home equity line of credit. At the end of the effective period for the initial rate, the interest rate adjusts periodically during the life of the loan based on changes in a specified financial index. Sometimes known as "start rate" or "intro rate". See " Teaser Rate ."

INSPECTION

A physical examination of a person, document or other thing, such as a home.

INSPECTOR

Any person charged with the task of making a physical examination of a person, document or other thing. Could be employed by a government body (i.e. an electrical inspector, fire inspector) or by a potential purchaser (a home inspector).

INSTALLMENT

A regular periodic payment.

INTRODUCTORY RATE

The starting rate for a home equity loan or line of credit, usually a discounted rate, for a short period of time. See initial interest rate.

INSTALLMENT LOAN

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

INSTRUMENT

A legal document in written form setting out certain rights of parties to it.

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 (PMI). If the borrower defaults on the loan, the insurer must pay the lender the lesser of the loss incurred or the insured amount.

INTER VIVOS

Latin meaning "during life". Used to describe a gift made during a person's lifetime (as opposed to a bequest in a will) or a trust.

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.

INTEREST PAYMENT

The portion of a monthly payment that goes to interest based on the amortization schedule.

INTEREST RATE

The percentage rate of return charged for use of a sum of money. This percentage rate is specified in the mortgage note. Also known as “Note Rate”.

INTEREST RATE BUYDOWN PLAN

A temporary buydown gives a borrower a reduced monthly payment during the first few years of a home loan and is typically paid for in an initial lump sum made by the seller, lender, or borrower. A permanent buydown is paid the same way but reduces the interest rate over the entire life of a home loan.

INTEREST RATE CAP

A clause in a Variable or Adjustable Rate Mortgage which limits the change in the interest rate charged. May limit change within a single adjustment period or over the life of the mortgage.

INTEREST RATE CEILING

The highest rate of interest chargeable under a Variable or Adjustable Rate Mortgage , as set out in the mortgage contract.

INTEREST RATE FLOOR

The lowest rate of interest chargeable under a Variable or Adjustable Rate Mortgage , as set out in the mortgage contract.

INTEREST-ONLY LOAN

A debt for which the periodic payments are enough to pay only the interest which accumulates on the principal over the payment period. Principal is due at maturity.

INTERIM FINANCING

1. A construction loan to pay for costs up to completion;
2. Another name for a bridge loan, a short-term loan designed to cover a gap of time between the purchase of a new home and the sale of the old when equity becomes available.

INTESTATE

1. A person who dies without leaving a will.
2. A description of having died without leaving a will.

INVESTMENT PROPERTY

A property that is not occupied by the owner and is generally rented to a tenant to produce income.