Impound
That portion of a borrower's monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Also known as reserves.

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.

In-File Credit Report
Information issued by one credit repository that contains an individual credit history for you to review in determining a loan applicant's creditworthiness.

Initial Interest Rate
The initial interest rate is the rate you pay when you first get your loan. On an ARM, this rate may be for 5 years (5/1 ARM) or only a month.

Inspection
Concerning autos, it's themechanical evaluation of aused autothat is advised before buying the vehicle. The inspection should be performed by an independent auto mechanic.

Installment Debt
Liability that typically has a fixed interest rate, fixed term, and equal payments amortized over a set number of months, agreed upon by the lender and the borrower prior to disbursement.
Insurance A type of legal relationship whereby individuals, companies and other entities concerned about the risk of losses pay premiums to an insurance company for protection against potential losses. Specific types of insurance relevant to vehicles include collision, comprehensive, uninsured motorist, underinsured motorist, rental reimbursement, and vehicle-related accident insurance.

Insurance Premium
The amount you must pay at specified intervals (e.g. monthly or semi-annually) to the insurance company to guarantee coverage from losses. The premium amount is calculated using various risk factors, which vary according to the type of insurance you are seeking.

Interest
A charge paid for borrowing money. Interest is usually expressed as a percentage of the amount borrowed or interest rate.

Interest Cost
Interest cost shows how much you will pay in interest over the life of the loan, assuming you keep the loan for the entire period.

Interest Due
Interest due is the portion of the mortgage payment that goes toward interest. When you close on your home, you will usually owe interest for the time between your closing date and when you make your first payment.

Interest Rate
The annual rate of interest on the loan, expressed as a percentage of 100.

Interest Rate Adjustment Period
The interest rate adjustment period is how often your rate is adjusted on an ARM after the initial rate period is over. For example, a 5/1 ARM means you have an initial rate period of 5 years that is fixed and then after 5 years, your rate changes every year.

Interest Rate Ceiling
The interest rate ceiling is the highest interest rate possible under an ARM. You may hear this called the lifetime cap and it based on the number of percentage points your rate can increase from your initial rate.

Interest Rate Decrease Cap
An interest rate decrease cap is the maximum allowable decrease in your interest rate (on an ARM) each time your rate is adjusted. It is usually 1 or 2 percentage points. If rates go down 4% your rate may only go down 2% due to the cap.

Interest Rate Floor
The rate floor is the lowest interest rate possible under an ARM loan.

Interest Rate Increase Cap
The interest rate increase cap is the maximum allowable increase in your interest rate (on an ARM) each time your rate is adjusted. It is usually 1 or 2 percentage points. For example, if your rate adjusts every year, each year it cannot exceed the stated cap.

Interest Rate Index
The interest rate index is the specific fund/security that your interest rate on an ARM is tied to. Common indexes are Treasury Constant Maturities or Cost of Funds indices. All the indices are published regularly in readily available sources.

Intro Period
The timeframe in which a special intro rate may be in effect. After the intro period ends, the interest rate will usually increase.

Intro Rate
Introductory rates are usually set below normal interest rates and may be offered only for a short period at the beginning of the loan or credit line. Lenders may use this special rate to attract borrowers. After a set timeframe, the interest rate will usually increase.

Investor
Money source for a lender.

Invoice Price
The manufacturer's initial charge to the dealer including freight, destination, or delivery charges. This price may not reflect the dealer's final cost due to rebates, allowances, discounts, and incentive awards the dealer may receive. To give you the negotiating advantage when buying a new auto, do your research. Find out the invoice price, and try to negotiate a purchase price that's close to the invoice price. Often a buyer will pay $100 to $300 over invoice, and both dealer and buyer will be happy. To negotiate an even better deal, find out if the manufacturer is currently offering any incentives to the dealer. If such incentives exist, you may get the dealer to take more money off the sales price by passing on at least some of the incentive to you. Autos that are in high demand and short supply will probably be sold close to, at, or even above the Manufacturer's Suggested Retail Price (MSRP). This is the invoice price plus the cost of add-ons as determined by the dealer.

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