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.

Impound Account
An account held by the lender to which the borrower pays monthly installments, collected as part of the monthly mortgage payment, for annual expenses such as taxes and insurance. The lender disburses impound account funds on behalf of the borrower when they become due. (Also known as Escrow Account.)

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.

improvement
A change that adds value to a house, prolongs its useful life, or adapts it to new uses.

indirect heating
Heating of rooms by a distant source of heat which is brought to each room by steam, water or hot air; also known as Central Heating.

indirect lighting
A system of artificial lighting in which light from the source is directed at the ceiling or walls to be reflected for general illumination.

indoor/outdoor
Type of carpet, regardless of construction, which is made entirely of components (surface yarn, backing, adhesives or laminating materials) which have been especially designed or treated to withstand moisture, extremes of temperature, ultraviolet rays and other types of exposure.

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
A published rate used by lenders that serves as the basis for determining interest rate changes on ARM loans.

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.

infiltration
Air from the environment that penetrates a building.

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 Rate
The rate charged during the first interval of an ARM loan.

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. 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.

instrument
A written legal document.

insulation
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.

insurance
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
Charge paid for borrowing money, calculated as a percentage of the remaining balance of the amount borrowed.

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 annual rate of interest on the loan, expressed as a percentage of 100.

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
Consumer safeguards which limit the amount the interest rate on an ARM loan can change in an adjustment interval and/or over the life of the loan. For example, if your per-period cap is 1% and your current rate is 7%, then your newly adjusted rate must fall between 6% and 8% regardless of actual changes in the index.

interest rate ceiling
The highest interest a lender can charge for an adjustable rate mortgage.

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.