impound or escrow account allows you to include, with your monthly principal and interest payment, a small portion of the cost toward your Real Estate Taxes and Hazard Insurance. The lender sets these additional funds aside until the Tax or Insurance bills come due, then pays the amount due from the account. Under some programs, an impound/escrow account may be mandatory; under others, it may be optional-although you may have to pay a fee to exercise that option. Back to List

escrow or impound account is established to allow the lender to collect property tax and hazard insurance payments on a monthly basis. The escrow/impound payment is collected with your monthly mortgage principal and interest payment and is calculated by taking your yearly tax and annual insurance payment and amortizing it over 12 months, along with a mandatory pad of at least two additional months worth of payments for each.

When borrowers make their monthly mortgage payments, they usually also make a payment towards the anticipated annual amount needed to pay taxes and insurance premiums. These funds are placed in an escrow account (also known as Impound account), until the lender pays the taxes and insurance as they become due.

impound account is a trust account established by the lender to hold money to pay for real estate taxes, and mortgage and homeowners insurance premiums as they are received each month

escrow account is established at the time you close your mortgage loan. This account is held by the lender for future payments as they become due of recurring items relating to the mortgaged property such as real estate taxes and insurance premiums.

Escrow or impound accounts are set up for you anytime you place less then 20% down payment on a house, or if you would like to have your property taxes and homeowners insurance included into your monthly payment. They will collect a maximum of 14 months depending on the month you close. You will then add every month to these accounts with part of your total house payment. The lender will make sure they are paid in full each year.

It's not a law- just different investor "rules." Have you ever heard the phrase "He who has the gold makes the rules?" FHA and VA require escrow accounts for all loans they insure and guarantee. There are so many different conventional investors and they vary as to their individual wants and needs.