Alexander Hall Mortgages Mortgage jargon buster Mortgage terms beginning with I

Mortgage jargon buster

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Illustration

A quotation prepared for a potential borrower that shows the cost of a mortgage, usually on a monthly basis.

Impaired Credit

The credit rating of a person with a less than perfect record of credit usage, for instance due to arrears on other loans, past CCJs or a past bankruptcy.

Income

The amount of money a person earns.

Income Multiplier

The formula used by lenders to calculate how much a prospective borrower can borrow. Normally this amount will be three or 3.25 times the person's income, or for joint applicants it is typically 2.5 times joint income.

Income Tax

A government tax that is levied on an individual's earned income.

Independent Financial Adviser (IFA)

A person qualified and regulated to advise on financial products such as mortgages, insurance and investment vehicles.

Index

A published interest rate, such as the Bank of England base rate, or the London Inter Bank Offer Rate (LIBOR), which is used to base the interest rate on a variable rate mortgage.

Index Tracker

A type of mortgage in which the rate of interest charged follows exactly ('tracks') any changes in a published interest rate, for instance the Bank of England base rate.

Inflation

The general rise in prices over time.

Initial Fees

An estimate of the total fees payable for arranging a mortgage, including items such as solicitor's fees, survey costs and reservation charges.

Initial Interest

As well as being the first interest payment on a mortgage, the Initial Interest is also usually higher than subsequent payments as it covers the period between the date of completion and the date when the first payment is due.

Initial Rate

The interest rate that applies between the start and end of any discount period on a mortgage.

Insurance Guarantee Premium

See Mortgage Indemnity Guarantee

Interest Only Mortgage

A type of mortgage in which the borrower only repays the interest on the loan for the duration of its term, and repays the full loan amount at the end of the mortgage period.

Interest Rate Charge Structure

The procedure of offering different mortgage rates depending on factors such as LTV, your income history, and credit rating.

Intermediary

A company such as AH which matches borrowers with lenders, as well as undertaking a certain amount of application processing. Typically an intermediary will receive a fee directly from the lender for these services.

Introducer

A person or company (broker or adviser) who introduces borrowers to lenders.

Investments

Savings that are designed to repay the principal on an interest only mortgage.

ISA (Individual Savings Account)

A tax-free investment product whereby individuals can place shares, cash or life insurance, or a combination of these, up to a specified value.

ISA Mortgage

An interest only mortgage that uses an ISA product to repay the loan.

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