Dictionary I

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impact fees
Fees collected from developers of new homes to pay for schools, parks, and other facilities.
implied warranty of habitability
Legal doctrine stating that all new homes are assumed to be fit for human habitation and meet all building codes.
A portion of the monthly mortgage payment that is placed in an account and used to pay for hazard insurance, property taxes and private mortgage insurance.
A change that adds value to a house, prolongs its useful life, or adapts it to new uses.
in-file credit report
A computer-generated report drawn from credit repositories and generally regarded as an objective history.
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income property
Property that is not occupied by the owner but is used to generate income.
incurable defect
A defect in a property that cannot be fixed, such as an adjacent hazardous waste site, or one that would cost too much to repair relative to the value of the property.
independent contractor
A person hired to do a particular job, subject to the direction of a supervisor. An independent contractor pays for his or her own expenses and taxes, and receives no employee benefits. Most real estate agents are independent contractors.
Financial tables used by lenders to calculate interest rates on adjustable mortgages and on Treasury bills.
Individual Retirement Account (IRA)
A tax-deferred savings account in which a person may accrue retirement funds.
infill development
Any significant new construction in an established area.
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infill housing
Home construction in established areas.
Air from the environment that penetrates a building.
Inflation occurs when there is more money available than there are goods and services to be purchased. Mortgage rates, which are determined by the marketplace and the actions of the Federal Reserve Board and Wall Street, are sensitive to inflation fears.
The roads, schools, parks, utilities, bridges, and communications systems in a community.
initial interest rate
The original interest rate on an adjustable rate mortgage.
initial rate cap
A specific limit defined by some adjustable rate loans (ARMs) for the maximum amount the interest rate may increase at the expiration of the initial interest rate.
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initial rate duration
Most adjustable rate loans (ARMs) offer an initial interest rate below the current market rate. This initial or “teaser” rate expires after a period called the initial rate duration, which may last months or years.
inlet valve
The mechanism inside a toilet tank that automatically fills the tank with water when the tank empties. The inlet valve is connected to the shutoff valve under the toilet.
inspection fee
A fee paid to determine the present physical condition of the home, required by the lender in order to supplement the information contained in the appraisal report.
inspection report
An examination of a home’s exterior, foundation, framing, plumbing, electrical system, heating, air conditioning, fireplace, kitchen, bathroom, roof, and interior.
installment contract
A purchase agreement in which the buyer does not receive the title to the property until all installments are paid.
installment sale
A real estate transaction in which the sales price is paid in installments.
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A written legal document.
Materials that slow heat loss, such as cellulose, glass fiber, rock wool, polystyrene, urethane foam, and vermiculite.
insurable title
Title to property that a company agrees to insure against defects and disputes.
Owners and buyers can purchase various types of insurance including hazard, private mortgage, and earthquake. The policies guarantee compensation for specific losses.
insurance binder
A temporary insurance arrangement usually put in force until a permanent policy can be obtained.
The fee borrowers pay to obtain a loan. It is calculated based on a percentage of the total loan.
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interest accrual rate
The rate at which interest accrues on a mortgage.
interest paid over life of loan
The total amount paid to the lender for the use of money during the time the money is borrowed.
interest rate
The fee, expressed as a percentage, charged for a loan. The interest rate also helps determine the monthly payment. For adjustable-rate loans, the interest rate may change from its initial level.
interest rate buy-down plans
For cash-short buyers, some sellers are willing to advance funds from the sale of the home to buy down the interest rate and reduce the buyer’s monthly obligation.
interest rate cap
The maximum interest rate charge allowed on the monthly payment of an adjustable rate mortgage during an adjustment period.
interest rate ceiling
The highest interest a lender can charge for an adjustable rate mortgage.
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interest-only loan
The borrower pays only the interest that accrues on the loan balance each month. Because each payment goes toward interest, the outstanding balance of the loan does not decline with each payment.
interim financing
Short-term financing used by sellers to bridge the gap between the sale of one house and the purchase of another (also known as bridge or swing loans). A construction loan is also a form of interim financing.
investment property
Real estate that generates income, such as an apartment building or a rental house.
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