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Immediate Participation Loan [back to top]
A loan where all partners contribute their share immediately.

Income Property Loan [back to top]
A loan that is secured on property which already has a source of income (e.g. rent); the loan is used to cover the debt service payments on the loan.

Income/Expense Ratio [back to top]
The ratio of operational expenses to gross income, expressed as a percentage.

Indenture [back to top]
A document of deed expressing certain issues, agreements or issues between the parties.

Injunction [back to top]
A judicial process or order requiring a person to whom it is directed to do or refrain from performing a particular act.

Instrument [back to top]
A written legal document.

Insurable Value [back to top]
Insurable Value is used to designate the amount of insurance which may be carried on destructible portions of a property to indemnify the owner in the event of loss.

Inter-Alia Mortgage [back to top]
A single registered document that encumbers multiple properties.

Interest Adjustment Date [back to top]
A date from which interest on a mortgage advanced is calculated for regular payments. The IA date is usually one payment period before regular mortgage payments begin, as interest payable is due from the date a mortgage is advanced.

Interest Escalation [back to top]
Rate of interest on a loan is raised periodically during the term of the loan.

Interest Only Loan [back to top]
Where the borrower pays back only the interest on the loan and there is no amortization until the end of the term. An "interest-only loan" may be used when a purchaser wishes to resell property after a short period or if they wish to accumulate enough income from the property before amortization.

Interest Rate [back to top]
The profit of a loan calculated on a percentage basis.

Interest Rate Differential [back to top]
A penalty for early prepayment of all or part of a mortgage outside of its normal prepayment terms. Normally this is calculated as the difference between the existing rate and the rate for the term remaining, multiplied by the principal outstanding and the balance of the term.


To calculate the IRD, given

1. $175,000 mortgage at 8.75% with 24 months remaining.
2. Current 2 year rate is 6.25%.
3. Differential is 2.5% per annum.
4. IRD is $175,000 * 2 years * 2.5% p.a. = $8750.

Interim Financing [back to top]
Interim loans are a short-term means of bridging the gap between the construction loan and the permanent loan (hence they are known as "bridge" loans) .

Intestate [back to top]
A person who dies without a will, or leaves one which is defective, in which case the estate descends (by operation of law) to the next of kin.

Irrevocable [back to top]
Incapable of being recalled or revoked, unchangeable or unalterable.