An impound, or escrow account, is a fund held by your mortgage lender into which you pay money to cover charges like property taxes and homeowners insurance. The escrow payments typically are included as part of your monthly mortgage payments. The mortgage lender pays your taxes and insurance as they become due during the year. If you do not have an escrow account, you are responsible for paying your taxes and insurance and budgeting accordingly.
Mortgage lenders typically encourage borrowers to set up an escrow account, as this money is held in an interest-drawing account for the mortgage lender. Many borrowers feel this short-term interest gained by the mortgage lender is worth the budgeting assistance an escrow account provides.
Whether you are purchasing or refinancing your home, many decisions need to be considered carefully. The entire staff here at Golden State Lending is here to help. With over a quarter century of combined lending experience in the complex California real estate market, let the experts at Golden State Lending help you evaluate your lending needs.