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Impact fees

Fees collected from developers of new homes to pay for schools, parks and other facilities.

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.

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 that would cost too much to repair relative to the value of the property.

Index

Financial tables used by lenders to calculate interest rates on adjustable mortgages and on Treasury bills.

Index lease

A lease in which the rental amount adjusts according to changes and/or movements in a price index, commonly the consumer price index.

Industrial property

Commercial properties that are used for the purpose of production, manufacturing, or distribution.

Infill development

Any significant new construction in an established area.

Inflation

Occurs when there is more money available than there are goods and services to be purchased.

Initial interest rate

The original interest rate on an adjustable-rate mortgage.

Initial investment

The outlay of cash needed to acquire an investment.

Insurable title

Title to property that a company agrees to insure against defects and disputes.

Insurance

Policies that can be purchased to guarantee compensation for specific losses.

Insurance binder

A temporary insurance arrangement usually put in force until a permanent policy can be obtained.

Interest

The fee borrowers pay to obtain a loan. It is calculated based on a percentage of the total loan.

Interest rate caps

A limit on the amount that can be charged to the monthly payment of an adjustable-rate mortgage during an adjustment period.

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. Since each payment goes towards interest, the outstanding balance of the loan does not decline with each payment.

Internal rate of return (IRR)

The percentage rate earned on each dollar that remains in an investment each year. The IRR of an investment is the discount rate at which the sum of the present value of future cash flows equals the initial capital investment.

Investment property

Real estate that generates income.

Some definitions come from the Certified Commercial Investment Member Institute (CCIM).