Glossary in Letter I

Impact fees
An impact fee is a fee most commonly assessed on the construction of new buildings within a jurisdiction. The purpose is to pay for expansion of new government buildings such as fire stations, police stations, sewer and water supply systems, parks, libraries, and other government agencies and services.
Implied warranty of habitability
Legal doctrine stating that all new homes are assumed to be fit for human habitation and meet all building codes.
Impounds
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.
In-file credit report
A computer-generated report drawn from credit repositories and generally regarded as an objective history.
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.
Index
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.
Infill housing
Home construction in established areas.
Inflation
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.
Infrastructure
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.
Initial rate duration
Most adjustable rate loans (ARMs) offer an initial interest rate below the current market rate.
Installment contract
An 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.
Insurance
Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of catastrophic financial loss. 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.
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.