An account used to pay your hazard insurance, mortgage insurance and property taxes
An impound account is set up by the lender for you to prepay certain recurring costs at closing, such as your first six months of property taxes, your first two months of hazard insurance, and your first two months of mortgage insurance, if required.
From then on, you pay these bills from this account. Some lenders let you waive the impound account, but may tack on additional points to your closing costs if you choose to not have one.
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