Glossary of Terms: I

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Income/Expense Ratio:
The percentage of monthly housing expenses versus monthly income.

Index:
A published table of yields or interest rates that is used to determine how much the interest rate of an adjustable rate mortgage will be changed either up or down.

Installment:
The periodic payment that a borrower agrees to pay a mortgage lender.

Interest:
A charge paid for borrowing money. Also, a right, share or title in property.

Interest Rate:
The annual rate of interest on a loan.

Interest Rate Adjustment Period:
This is period of time that states how often the rate is adjusted on an ARM loan, after the initial fixed rate period is over.

Interest Rate Cap:
A limit as to how much the variable interest rate may increase at any one time.

Interest Rate Floor:
A limit as to how low the interest rate may go on a floating rate instrument.

Investment Property:
Property that is owned with the intent to generate rental income and not intended for owner occupancy.

 

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