Mortgage Glossary
Impound Account
An account set up and operated by your mortgage lender that holds a portion of your monthly mortgage payments for payment of property taxes and insurance costs. Also known as Escrow Account.
Income
The sum of money from your sources of revenue, including salary, bonuses, interest and investment income. Income is an important piece of financial information that lenders review during the mortgage approval process.
Index
A published interest rate lenders used to determine the cost of borrowing money, including the changing rates on adjustable rate mortgages (ARMs). Some commonly used indices include the One-Year Treasury Index, the London Interbank Offered Rate (LIBOR), and the 11th District Cost of Funds (COFI).
Initial Monthly Payment
Upon closing, you will be provided with the monthly mortgage payment for your loan. An escrow analysis is completed after closing and based on the findings (i.e., changes to property taxes and homeowners insurance), the monthly payment could be subject to change. Ask your mortgage representative for an estimate of your PITI before closing.
Interest Only Mortgage
The amount you pay to borrow money from a lender, calculated as a percentage of the amount borrowed.
