In a typical mortgage escrow account, the lender collects monthly amounts from the borrower to pay for which of the following?
Correct Answer
B) Property taxes and homeowner's insurance
Mortgage escrow accounts collect monthly amounts from borrowers to cover property taxes and homeowner's insurance premiums, ensuring these obligations are paid on time. The lender holds these funds and disburses them when the bills come due.
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Related Topics & Key Terms
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Key Terms:
Related Concepts
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
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