Glossary of foreclosure terms: I

impound account: Account into which one pays property taxes and hazard insurance with every mortgage payment. Lenders require such accounts because its security could disappear or lose value if the borrower fails to pay for those items.

interest: Ongoing charge for borrowed money, expressed as a percentage. Put another way interest is to a loan what rent is to an apartment.

interest-only loan: Loan that only requires regular payments of interest, with no payments going toward the principal. Instead, the principal is usually repaid either when the loan terminates or when another event occurs.

Internal Revenue Service (IRS): Income tax authority of the U.S. government. www.irs.gov.

involuntary encumbrance: Property lien made without the owner's decision, such as property taxes or judgments. See also voluntary encumbrance.