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Mortgage Loan Glossary

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Impound
In terms of a mortgage loan, it is the inclusion of certain expenses into the loan's monthly payment.
Impounded Payment
Monthly mortgage loan payment that includes payment of taxes and insurance for the given property.
Income
Monetary gain from the total of returns on capital investment and wages earned from labor.
RELATED MORTGAGE TERMS: Gross Income|Net Income
Income Statement
Document that states the income of an individual such as IRS tax forms W-2 and 1099. Most mortgage banks and lenders require these documents from an individual before a mortgage loan application can be approved.
RELATED MORTGAGE TERMS: Documentation Requirements|Stips
Index
In terms of a mortgage loan, it is a table of interest rates used by lenders to determine fluctuations of an interest for an adjustable rate mortgage over a specified period of time.
Indexed ARM
Type of adjustable rate mortgage loans where the interest rate fluctuates according to an index rather than at the discretion of the lender. All adjustable rate mortgages in the United States are of this type.
MORTGAGE LOAN EXAMPLES: Indexed Mortgage Loan
Indexed Rate
The current published index value plus the current margin. The index rate would be 9.00 percent if the current published index value were 7.00 percent and the margin were 2.00 percent.
Inflation
A decrease in the value of the dollar due to the number of dollars in circulation exceeding the amount of goods and services available for purchase.
Initial Interest Rate
Interest rate that is fixed and used to calculate the monthly payment for the initial years of a hybrid adjustable rate mortgage.
RELATED MORTGAGE TERMS: Hybrid ARM
Initial Rate Period
The period of time the interest rate remains fixed during the beginning of a hybrid adjustable rate mortgage. This period of time usually lasts between one and ten years for the typical mortgage loan offered in the United States.
Installment
In terms of a mortgage loan, it is the set periodic payment a borrower agrees to make to the lender or other financial institution.
Insured Mortgage
Mortgage loan that is insured by the FHA or by a private mortgage insurance company.
Interest
In terms of a mortgage loan, it is the money paid by a borrower to a lender for financing the loan amount over the specified period of time.
Interest Accrual Period
Amount of time for which the interest due has been calculated.
Interest Accrual Rate
Percentage rate that is used to calculate the amount of interest due for a given period of time.
Interest Cost
Calculated amount of money that will be paid over the term of the mortgage loan by the borrower for financing the loan amount.
Interest Due
See Interest Payment
Interest Only Loan Program
Mortgage loan program where only the amount of accrued interest is paid in each monthly payment for a specified period of time. During this time the mortgage loan balance remains unchanged, but after this specified time frame the principal balance will begin to decrease with each monthly payment.
RELATED MORTGAGE TERMS: Adjustable Rate Mortgage (ARM)
MORTGAGE LOAN EXAMPLES: Interest Only Mortgage Loan
Interest Payment
Monthly payment for a mortgage loan where only the interest accrued is paid, and the principal balance in not reduced.
Interest Rate
In terms of a mortgage loan, it is the annual rate that is used to calculate the amount charged to a borrower for financing a mortgage.
RELATED MORTGAGE TERMS: Index
MORTGAGE LOAN EXAMPLES: Interest Rate
Interest Rate Adjustment Period
Time between changes of an interest rate in an adjustable rate mortgage loan.
Interest Rate Buydown
Option of a mortgage loan where the borrower may pay a fee to obtain a lower interest rate for a specified period of time.
Interest Rate Ceiling
Maximum interest rate that may be applied to a mortgage loan by a lender for an adjustable rate mortgage.
Interest Rate Floor
Minimum interest rate that may be applied to a mortgage loan by a lender for an adjustable rate mortgage. Applies in cases where the indexed interest rate falls below the interest rate floor.
Interest Rate Decrease Cap
Maximum amount an interest rate may decrease over a specific period of time for an adjustable rate mortgage.
Interest Rate Increase Cap
Maximum amount an interest rate may increase over a specific period of time for an adjustable rate mortgage.
Interest Rate Index
Specific index by which the particular adjustable rate mortgage loan program is adjusted in accordance with.
Internet
Publicly accessible system of interconnected computer networks that spans the entire globe.
MORTGAGE LOAN EXAMPLES: Internet
Internet Mortgage
Mortgage loan programs that use the internet as a primary medium in the transaction between the borrower and lender of the loan. In this type of mortgage loan program, costs are reduced therefore making it feasbile for that particular mortgage company to pass on savings to its customers.
MORTGAGE LOAN EXAMPLES: Internet Mortgage Loan
Investment Property (IP)
In terms of a mortgage loan, it is a property that is neither resided in or used as a second home, and is primarily used for rental income or income from capital gains.
RELATED MORTGAGE TERMS: Capital Gains|Second Home|Single Family Residence (SFR)|Uniform Residental Loan Application (1003)
MORTGAGE LOAN EXAMPLES: Investment Property
Investor
In terms of a mortgage loan, it is the source of funds that a lender gets money from to lend its borrowers.

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