IG premium
This is an indemnity guarantee premium (IGP) more commonly known as mortgage indemnity guarantee premium (MIGP). It insures the lender against any loss of money if a borrower should default on a loan or get it repossessed. This usually applies if you borrow more than 70 per cent of the purchase price however as mentioned most lenders tend to charge anything over 90% LTV. Even though you have to pay for the insurance premium, you must remember that you are not covered by the insurance, only the lender is.

Illustration
A typed example of the monthly cost of a mortgage and any other expenses associated with the loan such as set-up costs and fees.

Incentive
Inducements offered to borrowers to persuade them to take out a loan with a lender. E.g. free valuation, legal fees and cashback.

Income
As already stated under basic annual income.

Individual Saving Accounts (ISA)
A savings account for holding cash deposits, life assurance policies and investments in stock and shares in a tax privileged way. The Government have stated that ISA's will be available for a minimum of ten years.

ISA's are intended to build upon the experience of PEP's and TESSA's

Individual voluntary arrangement (IVA)
Introduced under the Insolvency Act 1986 with the intention of allowing an individual to avoid bankruptcy and make maximum possible restitution to creditors. An IVA is seen as preferable to bankruptcy as the debtor can retain his tools of trade. In the case of a professional person they are entitled to continue to practice, or hold company directorships. IVAs can be set up for a person or a company.

An Insolvency Practitioner petitions the High Court for protection for a borrower debtor under an IVA. A proposal is put to the creditors of whom 75% must accept. If this is achieved, the arrangement becomes binding upon debtor and all creditors named in the agreement. If the debtor fails to meet payments under an IVA the Insolvency Practitioner is likely to petition for the individual to be made bankrupt. Whilst bankruptcy normally lasts for three years many creditors insist that IVAs last a longer period.

Initial interest
This is a payment made to the lender which, covers interest between completion and the first monthly payment. e.g. if mortgage payments are normally due on the 30th of a month and the loan completes on 14th March, the first monthly payment may be due one month from 30th March, on 30th April. Therefore any interest due for the period from completion until 29th March will be due with the initial mortgage payment. Thus, the borrower's first mortgage payment will normally comprise one full month's payment plus the initial interest.

Initial rate
The interest rate charged from the commencement of the loan. Many mortgage products, e.g. fixed and discount, have an initial rate of interest, which will change at the end of the initial period.

Interest only
A loan for which only payments of interest are paid to the lender during the term of the loan i.e. the original loan is still owed at the end of the mortgage term. All mortgages other than capital and interest repayment loans are a form of interest only loan. Interest only loans are often linked to Pensions, endowments, ISA’s etc. Some lenders will allow loans to be set up without any specific provision to repay the capital at the end of the period this is more commonly known as a ‘pure interest only’ loan.

Introducer
The person who introduces a loan to a lender i.e. the broker.

Investment income
Income received from investments. Examples include rental income on investment property, dividends on equities or interest on deposits with financial institutions.

Irregular earned income
An additional income paid in addition to basic salary that is of an erratic nature. Payments are made to the employee but are not received on a regular basis.