When you read an article that says only 1/2 of the people understand exactly what an Impound account is or does... First I'm surprised, second, figure I better blog about it!
Frequently when you are buying a house, or when refinancing, your lender asks you if you want to impound your property taxes and insurance. They describe it as a savings account that pays your property taxes and home insurance when they become due. It becomes part of your monthly mortgage payment.
I'd actually never done it. Didn't know why we chose to do it for our Lake House, but we did. Works perfectly fine. My monthly mortgage billing shows how much is in our escrow account. Bet that confuses people since when they were buying a house it was called 'going through escrow'. And, I'm honestly not quite sure why they refer to it as an escrow account when the mortgage broker calls it an impound.
Regardless, there are a few things you need to know:
1) When your loan gets sold, or transferred, to a new servicer.... make SURE you let your insurance company know who the new servicer is so the billing gets to the right people and the insurance gets paid.
2) On the flip side, if you change insurance companies, you must let your mortgage company know so they pay the right insurance company.
3) When insurance and/or property taxes increase, so will your monthly mortgage payment. If you're in California, be prepared for insurance likely going up a lot. And, as noted in # 2 above, if you find someplace cheaper, don't forget to tell your mortgage company!
And, Congrats go out to two of our sellers this week! One had full contingency removal and is closing very soon. Another got multiple offers, is popping into escrow well over list price, and is scheduled for a 21 day close! Now, if we could just find a couple great properties for some special buyers, that'd be awesome!
It takes a team to make things happen!
We've got a great team here!
