Real Estate Definitions
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Illegal View (Quebec) Any exterior opening or opening in a structure or building that creates an illegal view of adjoining lands. Imports Goods and services produced in other countries and sold in Canada. Income Approach (To Value) A step in the valuation process of an income property. The value is reached by estimating the annual income minus an allowance for vacancies and bad debts and then subtracting annual operating expenses, real estate taxes, and insurance premiums to obtain the net operating income. This is then converted by capitalization into a capital value. Income Property A property that is developed or improved for the purpose of generating income. Also referred to as "non-owner occupied property" or "rental property." Income-splitting A financial strategy used for tax purposes to reduce the overall tax burden on a family. Income is shifted from one family member to another who is in a lower tax bracket, so the income is taxed at the lower rate to save the family money. Income Statement A statement that allows an individual to calculate his or her company's pre-tax profits by subtracting total expenses from total revenues. Also referred to as a profit & loss statement or P&L. Income Tax A tax that is levied by the Federal Government and by some Provincial or Municipal Governments on the annual income of an individual or a company. The amount or percentage taxed is based on the amount of an individual's earned and unearned income, using the government's graduated tax scale. Indefeasible 1. That which cannot be undone, annulled, or made void such as an indefeasible claim. 2. Indemnity Protection or exemption from loss or damage. Independent Bank A locally owned bank that is operated without being affiliated with a bank holding company. Also known as a community bank. Index In real estate, an index is a table of yields or interest rates being paid on debt (such as Treasury notes or bank deposits) that is used to determine interest-rate changes. Inflation An increase in the level of prices or a decline in purchasing power, caused by an increase in available currency and credit beyond the goods and services that are available. Informal Trust An investment account registered in the name of an adult, but is in trust for a child. The trust is used to save or invest funds for a child who can access and use the funds when he or she reaches the legal age. Also known as in-trust account or "bare" trust. Infrastructure Basic facilities, services, and installations needed for a community or society to function. Transportation and communication systems, hydro and electric, and public institutions such as schools and hospitals are all examples of infrastructure. Initial Interest Rate The introductory interest rate on an adjustable-rate mortgage (ARM), which typically changes at a predetermined time. Injunction A court order that prohibits a party from taking a specific course of action. inspection A house inspection involves a qualified expert examining the condition of a house and property. Typically, a home inspector will identify all necessary repairs. Inspection Report A formal written report detailing the examination of a property's visible structure and internal systems. The inspection and report are done prior to the completion of a real estate transaction. Installment A payment made towards the settlement of a debt that is typically paid at regular intervals to the creditor or lender. Institute of Canadian Bankers (ICB) An institute that provides education and training programs specific to professionals in the financial-service industry. Insufficient Funds (NSF) When there are not enough funds in a bank account to cover a pre-authorized payment, cheque, or draft made on the account. Also known as non-sufficient funds (NSF). Insurable Title A title that a title insurance company is willing and able to insure. Insurable Value A term used to designate the amount of insurance that can be carried on destructible portions of a property to indemnify the owner in the event of loss. Intangible Asset An asset such as a patent, permit, computer program, or claim that has no physical properties. It is difficult to assign values to these types of assets. Intangible Property Property such as stocks, bonds, or franchises that gets value from what it represents and not from its physical nature. Business furniture and equipment are examples of tangible personal property because they do not represent something else of greater value and they serve their intended functions. Interac Canada's largest shared network of Automated Teller Machines (ATMs) that enables cardholders to access their accounts from any ATM on the network regardless of which bank the cardholder does business with or which bank owns the ATM. Interac Direct Payment A way to pay for goods and services electronically using your bank card. The merchant swipes your card, you approve the amount, select the type of bank account (usually chequing or savings), enter a Personal Identification Number (PIN), and give final approval for the funds to be immediately withdrawn from your bank account and transferred into the merchant's account. You are given a paper record to verify the transaction. Interest Money that is paid by a borrower to a lender for the use of borrowed funds. Interest is usually expressed as an annual percentage. Interest Adjustment Date The date one month prior to the beginning of amortization when accrued interest computed on the monies advanced becomes due. Interest Factor The decimal equivalent for an interest rate on a unit amount for a time period. It is computed by interest rate divided by number of days in basic year times the number of days accrued. Interest Rate Cap A limit that is imposed upon interest rate increases and decreases for an adjustable rate loan. The cap or limit can be imposed from one adjustment period to the next or over the entire life of the loan. Interim Financing The availability of funds on a daily basis to assist a developer with financing for a construction project between advances made by the lender of the construction loan. Internal Rate of Return That rate at which the current worth of all present and future investment costs equals the current worth of all present and future investment benefits. International Banking The operation of bank branches and subsidiaries located outside Canada. This area of banking also includes the supervision of correspondent banking relationships, foreign exchange trading, and trade finance. International Chamber of Commerce (ICC) A world business organization that brings business people and experts together to formulate policies in such areas as banking, taxation, and the environment. International Organization for Standardization (ISO) An international organization created to promote standardization around the world. ISO sets standards in many businesses and technologies, including computing, communications, engineering, and environment. Inventory 1. The amount of goods and raw materials in stock and ready for sale. 2. A detailed list of all goods and materials in stock that is compiled at regularly scheduled intervals over the operating year. Investment Putting money into something, such as a stock, bond, or property, usually for income or profit. Investment Banking Bank operations that manage a bank's funding position, as well as its holdings of Treasury bills, bonds, and preferred and common stock. Investment Income Income that is earned from investments such as interest, dividends, and capital gains. Irrevocable Impossible to take back or retract. |
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