What is Impound Account?
An impound account is a lender-managed account that collects monthly portions of property taxes and insurance and pays those bills when due.
An impound account, also called an escrow account, is set up by the servicer to hold funds for property taxes, homeowners insurance, and other recurring expenses. Borrowers meet it because lenders often require an impound account to ensure these bills are paid on time. Each month, part of your mortgage payment goes into the account. Watch for escrow analysis statements that adjust your monthly payment if taxes or insurance change. You may have the option to waive impounds with a fee, but not all loan programs allow it.
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