Glossary

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There are 56 names in this directory beginning with the letter I.
Implied
Not expressed in words, but under_stood from actions or circumstances. Compare: Express.
Impound Account
see Escrow Account.
Improvement
A man-made addition to real property.
Improvements
Additions to raw land such as buildings, streets, sewers, etc. that increase the value of the property.
Improvements, Misplaced
Improvements that do not fit the most profitable use of the site; they can be either overimprovements or underimprovements.
Income Approach to Value
One of the three main methods of appraisal, in which an esti_mate of the subject property's value is based on the net income it produces; also called the capi_talization method or investor's method of ap_praisal.
Income Property
Property that generates rent or other income for the owner, such as an apart_ment building. In the federal income tax code, it is referred to as property held for the produc_tion of income.
Income Ratio
A standard used in qualifying a buyer for a loan, to determine whether he or she has sufficient income; the buyer's debts and proposed housing expense should not exceed a specified percentage of his or her income.
Income, Disposable
Income remaining after income taxes have been paid.
Income, Effective Gross
Ameasure of a rental property's capacity to generate income; calcu_lated by subtracting a bad debt/vacancy factor from the economic rent (potential gross income).
Income, Net
The income that is capitalized to estimate the property's value; calculated by sub_tracting the property's operating expenses (fixed expenses, maintenance expenses, and reserves for replacement) from the effective gross in_come. (Note that debt service is not subtracted in calculating net income.)
Income, Potential Gross
A property's eco_nomic rent; the total income it could earn if it were available for lease in the current market, before making any deductions (for bad debts, vacancies, operating expenses, etc.).
Income, Residual
The amount of income that an applicant for a VA loan has left over after taxes, recurring obligations, and the proposed housing expense have been deducted from his or her gross monthly income.
Income, Spendable
The income that remains after deducting operating expenses, debt service, and income taxes from a property's gross in_come. Also called net spendable income or cash flow.
Incompetent
Not legally competent; not of sound mind.
Incorporeal Rights
Rights in real property that do not involve physical possession of anything, such as a dominant tenant's right to use the servient tenant's land an easement. An easement appurtenant is an incorporeal hereditament, be_cause it is inheritable, but an easement in gross is merely an incorporeal right, because it is not inheritable.
Increasing and Decreasing Returns, Principle of
An appraisal principle which holds that a point is reached where additional investments (in the form of labor or capital) in a piece of property will not be justified by the resulting increase in net income. Also called the principle of contribution.
Increment
An increase in value; the opposite of decrement.
Indemnify
To protect another person against loss or damage.
Independent Contractor
A person who con_tracts to do a job for another, but retains con_trol over how he or she will carry out the task, rather than following detailed instructions. Compare: Employee.
Index
The published cost of money that serves as the minimum basis for determining the interest rate for an adjustable rate mortgage. Among the commonly used indices are the Prime Rate (Prime), the London Interbank Offering Rate (LIBOR), the Cost of Funds (COF) and the 1 year Treasury Bill (1 year T). The particular index is generally, though not always, selected based on how often an interest rate is supposed to adjust. Loans that allow monthly interest rate adjustments commonly use the Prime Rate. L
Index, Tract
An index of recorded documents in which all documents that carry a particular legal description are grouped together.
Indexes, Grantor/Grantee
Indexes of re_corded documents maintained by the recorder, with each document listed in alphabetical order according to the last name of the grantor (in the grantor index) and grantee (in the grantee in_dex); the indexes list each document's record_ing number, so that the document can be located in the public record.
Ingress
A means of entering a property; the op_posite of egress. The terms ingress and egress are most commonly used in reference to an ac_cess easement.
Initial Note Rate
The rate of interest that takes effect at the closing of a loan and which determines the monthly payment(s) for the early portion of the loan. The period of time during which this rate applies is often short and the rate may be lower than.
Injunction
A court order prohibiting someone from performing an act, or commanding per_formance of an act.
Innocent Improver
Someone who makes an improvement on land in the mistaken belief that he or she owns the land. Also called a good faith improver.
Installment Sale
1) When a seller accepts a mortgage for all or part of the sale, tax on the gain is paid as the mortgage principal is collected. 2)Under the federal income tax code, a sale in which less than 100% of the sales price is received in the year the sale takes place. 3) see Contract for Deed.
Instrument
A legal document, usually one that transfers title (such as a deed), creates a lien (such as a mortgage), or establishes a right to payment (such as a promissory note or contract).
Insurance, Hazard
Insurance against damage to real property caused by fire, flood, theft, or other mishap. Also called casualty insurance.
Insurance, Homeowner's
Insurance against damage to the real property and the homeowner's personal property.
Insurance, Mortgage
Insurance that protects a lender against losses resulting from the borrower's default. Also called mortgage de_fault insurance.
Insurance, Mutual Mortgage
The mortgage insurance provided by the FHA to lenders who make loans through FHA programs.
Insurance, Private Mortgage (PMI)
Insur_ance provided by private companies to conven_tional lenders for loans with loan-to-value ratios over 80%.
Insurance, Title
Insurance that protects against losses resulting from undiscovered title defects. An owner's policy protects the buyer, while a mortgagee's policy protects the lien position of the buyer's lender.
Insurance, Title, Extended Coverage
Title in_surance that covers problems that should be dis_covered by an inspection of the property (such as encroachments and adverse possession), in addition to the problems covered by standard coverage policies.
Insurance, Title, Standard Coverage
Title in_surance that protects against latent title defects (such as forged deeds) and undiscovered re_corded encumbrances, but does not protect against problems that would only be discovered by an inspection of the property.
Integration
In a property's life cycle, the ear_liest stage, when the property is being devel_oped. Also called development.
Inter Vivos
During one's life.
Interest
1. A right or share in something (such as a piece of real estate). 2. A charge a bor_rower pays to a lender for the use of the lender's money.
Interest Only
Payments are made on the interest only. The principle balance remains the same. When the loan is paid off, the original principle balance is due.
Interest Rate
The percentage of the loan amount charged for borrowing money; i.e., the cost of the money expressed as a percentage.
Interest, Compound
Interest computed on both the principal and the interest that has ac_crued on the principal. Compare: Interest, Simple.
Interest, Future
An interest in property that will or may become possessor}' at some point in the future, such as a remainder or reversion.
Interest, Prepaid
Interest on a new loan that must be paid at the time of closing; covers the interest due for the first month of the loan term. Also called interim interest.
Interest, Simple
Interest that is computed on the principal amount of the loan only (which is the type of interest charged in connection with real estate loans). Compare: Interest, Com_pound
Interest, Undivided
A co-owner's interest, giving him or her the right to possession of the whole property, rather than to a particular section of it.
Interim Financing
A loan, including a construction loan, used when the property owner is unable or unwilling to arrange permanent financing.
Interpleader
A court action filed by someone who is holding funds that two or more people are claiming. The holder turns the funds over to the court, which resolves the dispute and de_livers the money to the party entitled to it.
Intestate
Without a valid will.
Intestate Succession
Distribution of the prop_erty of a person who died intestate to his or her heirs.
Invalid
Not legally binding or legally effective; not valid.
Inventory
A detailed list of the stock-in-trade of a business.
Inverse Condemnation Action
A court ac_tion by a private landowner against the govern_ment, seeking compensation for damage to property as a result of government action.
Inverted Pyramid
A way of visualizing own_ership of real property; in theory, a property owner owns all the earth, water, and air enclosed by a pyramid that has its tip at the center of the earth and extends up through the property boundaries out into the sky.
Investment Property
Unimproved property held as an investment in the expectation that it will appreciate in value.