Mortgage Terminology
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Impound or Reserves
The portion of a borrower's monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due.
Index
A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments (includes: three and five year U.S. Treasury security yields, the monthly average interest rate on loans closed by savings, and loan institutions, and the monthly average costs-of-funds incurred by savings and loans). It is then used to adjust the interest rate on an adjustable mortgage up or down.
Indexed Rate
The sum of the published index plus the margin. For example, if the index is 4% and the margin is 2.75%, the indexed rate would be 6.75%. Often, lenders charge less than the indexed rate the first year of an adjustable rate mortgage.
Initial Interest Rate or Start Rate/ Teaser Rate
This refers to the original interest rate of the mortgage at the time of closing. This rate changes for an adjustable rate mortgage (ARM).
Installment
The regular periodic payment that a borrower agrees to make to a lender.
Insured Mortgage
A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (MI).
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 Rate Buydown Plan
An arrangement that allows the property seller to deposit money to an account. That money is then released each month to reduce the mortgagor's monthly payments during the early years of a mortgage.
Interest Rate Ceiling
The maximum interest rate for an adjustable rate mortgage (ARM) as specified in the mortgage note.
Interest Rate Floor
The minimum interest rate for an adjustable rate mortgage (ARM) as specified in the mortgage note.
Interim Financing
A construction loan made during completion of a building or a project. A permanent loan usually replaces this loan after completion.
Investor
A money source for a lender.
The portion of a borrower's monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due.
Index
A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments (includes: three and five year U.S. Treasury security yields, the monthly average interest rate on loans closed by savings, and loan institutions, and the monthly average costs-of-funds incurred by savings and loans). It is then used to adjust the interest rate on an adjustable mortgage up or down.
Indexed Rate
The sum of the published index plus the margin. For example, if the index is 4% and the margin is 2.75%, the indexed rate would be 6.75%. Often, lenders charge less than the indexed rate the first year of an adjustable rate mortgage.
Initial Interest Rate or Start Rate/ Teaser Rate
This refers to the original interest rate of the mortgage at the time of closing. This rate changes for an adjustable rate mortgage (ARM).
Installment
The regular periodic payment that a borrower agrees to make to a lender.
Insured Mortgage
A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (MI).
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 Rate Buydown Plan
An arrangement that allows the property seller to deposit money to an account. That money is then released each month to reduce the mortgagor's monthly payments during the early years of a mortgage.
Interest Rate Ceiling
The maximum interest rate for an adjustable rate mortgage (ARM) as specified in the mortgage note.
Interest Rate Floor
The minimum interest rate for an adjustable rate mortgage (ARM) as specified in the mortgage note.
Interim Financing
A construction loan made during completion of a building or a project. A permanent loan usually replaces this loan after completion.
Investor
A money source for a lender.
