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Impound Accounts when Buying or Refinancing a Home
Impound Accounts when Buying or Refinancing a Home
When you buy a home and secure the purchase with a mortgage, 
not only will you be required to pay the monthly loan payments, you will be making a commitment, for as long as you own the property, to pay the property taxes every year as well as maintaining a homeowners insurance policy. And depending on the amount of down payment, you might be required to pay for private mortgage insurance. On home loans with less than 20% down, impound accounts are typically mandatory. Money to make these payments is kept by the lender or third party in an impound account.
 
So what exactly is an impound or escrow account?
 
An impound is an account is where your monthly deposits are made and then paid out as needed by the lender to cover the taxes and insurance at the proper time. This method will allow you to make level monthly contributions rather than making one or two large payments when they are due. This will really help your monthly budgeting process as these large payments always seem to occur when you can least afford it. 
 
Because these holding accounts relieve the burden of coming up with a larger ... more

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