Glossary I

INCOME APPROACH
A method used by an appraiser to estimate the value of a property by calculating its generated income.

INDEMNITY
A protection against actual loss or damage as a result of the matter mentioned. An indemnity is not an absolute guarantee that something won’t happen; it states the terms under which an actual loss will be compensated.

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 (such as one-, 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), which is then used to adjust the interest rate on an adjustable mortgage up or down.

INGRESS AND EGRESS
Applied to EASEMENTS, meaning the right to go in and out over a piece of property but not the right to park on it.

INSURABLE TITLE
Title subject to a defect or claim, which a title insurance company is willing to insure against.
compare MARKETABLE TITLE

INSURED CLOSING LETTER
An indemnity given to a lender from a title insurance company, agreeing to be responsible if the closing agent does not follow the lender’s instructions or misappropriates the loan proceeds. Lenders usually require an insured closing letter be on file for each settlement.

INTERIM FINANCING
A construction loan made during completion of a building or a project. A permanent loan usually replaces this loan after completion.

INITIAL NOTE RATE
With regard to an adjustable rate mortgage, the note rate upon origination. This rate may differ from and is usually less than the fully indexed rate.

INTESTATE
An estate without a Will.
compare TESTATE
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