What are IMPOUNDS on a home loan? I'm first time buyer and it says YES next to IMPOUNDS on loan terms.?

Answer 1

they are your escrows. Which are your taxes and insurance. Yes, means that you are going to pay these in your monthly payment. They go into an account and the mortgage holder pays them for you when they are due. So you dont have to worry about it or forget. Otherwise you have to come up with all the money when the taxes and insurance are due, most people cant do this, so they pay impounds monthly. BEST WAY TO GO IF U CAN!!

Answer 2

First answer is correct, but I'll add a few things.

One, if you don't escrow the taxes and insurance, most mortgage companies charge a slightly higher interest rate, which means your payments are about the same with or without impounds. Escrow is better for that reason alone.

Bear in mind also that the money in Escrow is your money, and it is going to pay your bills. When you pay off the loan, you get all that's left back. If they don't have enough to cover the tax bill, you have to make up the difference. If your taxes and insurance go up, your Escrow payment goes up.

Most of the time, the mortgage company does what they are supposed to do. You might check with your Tax Collector the first time that payment is due to see if they made the payment. They probably will, but if you're that one in a million, better to catch it before there's a penalty.

Answer 3

This is a very interesting topic

Answer 4

I too have the same question