A GLOSSARY OF REAL ESTATE TERMS

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Impound Account
Account held by a lender for payment of taxes, insurance or other related expenses. Also known as an escrow account.
Improvement
Valuable additions to property which raise the value of the property.
Improvement Cost
If the Loan Purpose is Refinance, identifies the cost of the improvements (e.g. renovations, capital improvements) made to the property following the acquisition.
Improvements Made
If the Loan Purpose is Refinance, identifies the whether improvements (e.g. renovations, capital improvements) were made to the property following the acquisition.
Incidental Recording, Delivery, Wire, etc., Fees
Other costs that are incurred when a real estate loan is closed.
Identifies whether any of the income to the property is subsidized; rents that are partly paid by the government (e.g. Section 8 residential subsidies).
Increase of Base Yr. Expense Reimbursement
Identifies that any cost of the associated item over the base year is paid by the lessee. The base year is the year upon which a direct expense escalation of rent is based.
Index
A published rate or benchmark measure of current interest rate levels used to calculate periodic changes in rates charged on adjustable rate mortgages.
Index Rate
Identifies the loan Index Rate that is being quoted.
Individual
A borrowing entity such as a person and may include a borrower plus a co-borrower or co-borrowers.
Industrial
A general property type or building type classification characterized by its usage for industrial purposes.
Installment Sale
A tax term used to describe a sale which is usually accomplished by use of a land contract.
Insurance
Identifies the method by which the tenant is responsible for payment or reimbursement of insurance.
A mortgage insured against loss to the mortgagee (lender) in the event of default and failure of the mortgaged property to satisfy the balance owing plus cost of foreclosure.
Interest Accrual Method
The method by which interest is calculated through the loan term; options include Actual 360, Annual 365, 30/360, and Actual/Actual.
Interest Calculation Method
Identifies the interest rate calculation used to determine the loan results, options include 30/360, Actual/360.
Interest Only Strip
When a mortgage interest rate exceeds the interest rate paid on the security backed by the mortgage, the excess interest is "stripped" and sold as an I/O strip; referred to as I/O Strip. The "strip" is usually described in the (notional) amount of the original security classes it was stripped from and then sold for pennies on the dollar basis. These are very volatile securities. I.e., if several loans prepay earlier than expected there many not be an interest stream to pay the interest on the "strips".
Interest Payment Notification (1098)
A federal tax form that lenders use at year end to notify borrowers of the interest that was paid on their mortgage over the last year.
Interest Paid vs. Interest Impacted
An important clause in the CMBS structure that determines how and when losses are allocated (e.g. are losses allocated before principal is paid or after principal is paid?). This clause impacts the yield of the lowest class of certificate holders.
The percentage of an amount of money which is paid for its use for a specified time.
Interest Rate Cap
Limits the interest rate or the interest rate adjustment to a specified maximum. This protects the borrower from increasing interest rates.
Interest Rate Index
A published interest rate, such as the Prime Rate, LIBOR, Treasury Bill / Treasury Note rate, 11th District COFI, etc. Lenders use indexes to establish interest rates charged on mortgages or to compare investment returns. A final note rate typically includes an Index Yield plus a Spread.
Interest Rate Rounding
The method of rounding the components of or the final note interest rate; the rounding method returns a rounded interest rate; rounding is typically to the nearest 1/8th of one percent.
Interest Rate Spread
The number of basis points over a base rate index; the difference between the rate at which money can be borrowed and the rate at which it is loaned. A final note rate typically includes an Index Yield plus a Spread.
Interest Rate Type
If the Loan Purpose is Refinance, identifies the interest rate type of the existing mortgage note.
The internal rate of return (IRR) is a capital budgeting method used by firms to decide whether they should make long-term investments..
Intestate
Someone who has died without leaving a valid will.
A property that is not occupied by the owner and in most cases produces income or is held for gains from appreciation.